Alternative assets managers now hold $7.4 trillion in assets under management, based on data gathered in 2015, according to alternative assets data provider Preqin.
The increase, 7% up from assets held in 2014, reflects growth in the private capital industry in particular. Preqin defines private capital as closed-end alternative asset funds, such as private equity, venture capital, private debt, real estate, infrastructure and and natural resources. It said total private capital assets under management were $4.2 trillion as of June 2015, compared to $3.2 trillion in hedge funds as of November 2015. Hedge fund assets were $3.197 trillion as of December 2014, with the Preqin All-Strategies Hedge Fund benchmark returning 2.02% in 2015. The $71.5 billion added by hedge funds in 2015 was almost all in the first half of 2015, with a net outflow of $4.8 billion in the second half of 2015. Preqin chief executive, Mark O’Hare, commented: “The private capital industry has continued to show healthy growth over the past year. It has been fuelled by the rise in dry powder levels, following another strong year for fundraising and an increase in the unrealised value of portfolio assets.”
Private equity buyout and venture capital funds raised $199 billion in 2015 and 88% of investors said that they expected to commit the same amount or more in 2016. Private real estate funds made an average return of 16% over three years to June 2015 and 89% of investors said that their real estate investments either met or exceeded their expectations in 2015. In infrastructure, Preqin found capital being concentrated among fewer managers, as investors seek proven experience. It said 52% of capital raised in 2015 was secured by the six largest funds.