Alternatives have surged in popularity in Europe among global investors, a report issued by Preqin and Amundi said.
According to the report, most alternative asset classes saw record activity in Europe during the last fiscal year, with Europe-based alternative asset managers holding €1.62 trillion in AUM as of June 30, 2018, up nearly €300 billion from the same period three years prior.
Although hedge funds remain the largest asset class within European alternatives market, with €570 billion in assets as of Dec. 31, its AUM fell by 9% on a year-over-year basis due to underperformance. Meanwhile, private equity has grown by 8% in the first half of 2018 to reach €559 billion in the region as of June 30, 2018.
"Europe's alternative assets industry is in rude health, with assets under management surging even as the wider financial picture remains cool," Preqin CEO Mark O'Hare said in a news release announcing the report. "Moreover, it is extremely diverse both in terms of asset class and the different regions and countries across the continent. With more than 6,300 fund managers and 3,000 investors active in Europe, it is more important than ever to shed light on the incredible array of opportunities present throughout the region."
The U.K. remains the largest market, with fund managers based in the country holding €948 billion in AUM.
Fiscal year 2018 also saw record deal values for private equity buyout, venture capital and infrastructure transactions in Europe. All told, total private capital deals reached a record €375 billion.
The report notes that there are currently 3,900 investors targeting private equity investments in Europe. The largest proportion, at 48%, are based in North America. Roughly 80% of global investors are targeting private equity and real estate investments in the region, with 59% seeking investments in hedge fund investments. A minority of institutional investors are targeting real assets and private debt, the report said.