Global alternative assets under management topped $10 trillion as of June 30 and are on track to exceed $14 trillion by 2023, a new report from Preqin shows.
AUM grew from $9.56 trillion at the end of 2018 and $6.43 trillion at the end of 2013, according to the report, "Alternatives in 2020."
The growth projection to more than $14 trillion in AUM by 2023 is on track to meet or exceed Preqin's projection in its 2018 report, "The Future of Alternatives."
The 2020 report cites excellent long-term investment returns and the continuing advantages of the alternative industry's diversification in attracting new investors. About 80% of all institutional investors globally invest in alternatives, the report said.
Fund managers have had to adapt to challenging market conditions, including the consolidation of hedge funds, falling activity in traditional private equity areas such as retail, the movement of infrastructure managers up the risk/return curve, and the sea change of real estate funds as a result of the move toward e-commerce.
Among the trends noted in the report are the capital consolidation of private equity funds, which saw 39% of all capital raised going to the 20 largest funds in 2019; a shift in the attitude of private debt investors toward environmental, social and governance considerations; the increasing demand among investors for emerging hedge fund managers; and the ongoing debate about when the expected real estate market correction will take place.