About 40% of manager hires by U.S. institutional investors in 2007 went into alternative investments, according to an analysis of publicly reported searches by consultant Eager Davis & Holmes’ Tracker service. Those alternative investment allocations accounted for 32% or $78 billion of the total $244 billion U.S. institutional investors assigned last year. That’s compared to 22.3% of all hires and 17.1% of all assignments made from 2002 to 2006.
Private equity and venture capital together accounted for 61.7% of all alternative manager hirings and 57.5% of alternative investment dollars in 2007, compared to 59.9% and 58.8%, respectively, in the prior five-year period. Hedge funds accounted for 12.8% of all alternative hires in 2007 and 18.5% of overall alternative investment dollars, compared to 19.4% and 17.5%, respectively, in the earlier period. Hires of infrastructure managers accounted for 2.2% of alternatives hirings and 3.9% of dollars invested in alternatives last year, vs. 0.2% and 0.3%, respectively, between 2002 and 2006. Distressed investments accounted for 3.5% of alternative manager hires and 3.1% of dollars invested in alternatives in 2007, compared to 2.5% and 1.8%, respectively, in the earlier five-year period.
