Alternative products may be pricey, but pension funds are still enlarging their alts allocations.
A third of the $3.5 trillion in assets under management run by the 100 largest alts asset managers comes from pension funds, reports Value Walk. The largest alternative manager in the world, according to consultant Towers Watson, is the Macquarie Group in Australia with $92.3 billion in alternative assets under management, $59.3 billion of which comes from pension funds. The rest of the alternative assets come from wealth managers, insurance companies, sovereign wealth funds, bank, funds of funds, and endowments, in that order.
Of the alternative options, real estate funds hold 33% of the total assets under management, the largest of any alternative asset class. Hedge funds have about 23%. Private equity is still a smaller portion of the pie, but pension allocations were up almost 50% between 2010 and 2014. Most of the alt assets, about 47%, are invested in the U.S., followed by 36% in Europe and 9% in Asia.
Following Macquarie, the largest alts managers are Bridgewater Associates, CBRE Global Investors, The Blackstone Group, and TPG Capital. The top alts managers for pension funds are the Macquarie Group, Bridgewater Associates, Carlyle Investment Solutions, CBRE Global Investors, and TIAA-CREF, in that order.
Photo: DAVID HOLT