Investments in alternatives by the nation's largest money managers have exploded.
Together, they managed at least $563 billion in hedge funds, hedge funds of funds, real estate, private equity, venture capital, structured finance and a variety of hybrid instruments as of June 30.
Some of the behemoth managers of traditional stock and bond strategies have had amazing success in just the last five years, sweeping into the kinds of esoteric investment strategies that once were the domain of smaller, specialty boutiques.
In the growth race, giant indexer Barclays Global Investors NA, San Francisco, leads the pack. BGI's alternative assets under management skyrocketed 4,873% in the five years ended June 30. BGI had a mere $246 million invested in hedge funds in June 1999. Five years later, that number grew to $12.2 billion in all alternatives, including $7.5 billion in hedge funds, $2.6 billion in equity real estate and $1.2 billion in structured products.