Australian infrastructure and real estate managers are strongly competing for global capital to manage, featuring prominently in a list of top managers ranked as part of Towers Watson’s Global Alternatives Survey 2012.
The survey ranks the top 100 asset managers by assets under management, with Macquarie Group’s infrastructure arm being knocked from its number-one spot to third on the ranking this year.
Macquarie Group, with more than US$88.67 billion in assets under management, topped the list of Australian managers and was also the top-ranking infrastructure manager globally.
There were four Australian managers who made it into the top 100 alternative asset managers.
Real estate managers Goodman (73), AMP Capital Investors (92) and Dexus Property Group (98) rounded out the Australian representation in the top 100 managers.
Goodman has embarked on an aggressive expansion of its operations this year, announcing in June that it would enter the North American market for the first time in a $1.5-billion partnership with California-based Birtcher Development and Investments.
Overall there are 20 Australian managers featured in the survey with combined assets under management of $254 billion.
The view from Towers
Martin Goss, senior investment consultant at Towers Watson Australia, says the ongoing economic uncertainty has driven investors towards further diversifying their portfolios.
This has put alternatives managers in the box seat, with assets under management for the top 100 managers globally now exceeding $3 trillion.
Located around the world, the 493 managers in the survey manage almost $5 trillion in assets.
Of these top 100 managers, real estate managers have the greatest slice of the assets, with 35 per cent or more than $1.1 trillion under management. They are followed by private equity managers with 22 per cent and hedge fund managers at 21 per cent.
“Allocations to alternative assets now account for 20 per cent of all pension fund assets globally, up from 5 per cent 15 years ago,” Goss says.
While North America attracts more than half of the funds allocated to these top 100 managers, the Asia-Pacific region is a notable destination for capital, with 10 per cent of these funds.
Goss says that ongoing concern about world economic growth is likely to see funds continue their flow into alternative assets.
“The ongoing economic uncertainty is likely to encourage investors away from simply holding equities as their dominant growth asset and towards a greater use of alternative assets,” he says.
“We think the effort to diversify in this way is worthwhile, but investors need to be cautious about choosing the best and most efficient vehicles, not forgetting the increasing number of cheap and lower governance routes for improving investment efficiency, such as using smart beta.”
Towers Watson also divided its survey results of managers into different asset classes.