In commodities, returns played a role in the big increase, said Jay Kloepfer, executive vice president and director of capital markets research at San Francisco-based consultant Callan Associates Inc.. The Dow Jones-UBS Commodity Index Total Return had return of 16.83% in 2010.
Commodities are highly volatile. “They can go up 60% and down 60%. You have to be prepared to ride it out,” Mr. Kloepfer said. However, if commodities are trending up, investors can ride the wave . At the same time, they are highly liquid, unlike other alternative asset classes, making them more appealing.
The top commodities manager on this year's list is Geode Capital Management, whose assets rocketed 236% to $10.6 billion, an increase attributed to the addition of a large new account as well as strong inflows. Gresham Investments was second, with assets up 58% to $5.8 billion, and PIMCO retained third, with commodities assets up 62% to $3.9 billion.
Asset increases in buyout and venture capital sectors were mainly the result of manager portfolio companies increasing in values in 2010, said Gary Robertson, senior vice president of Callan. “We're in a recovery,” he said. “The returns bottomed out in the first quarter of 2009, after that there has been seven quarters when the market has been marching up.”
In the year-earlier survey, assets of buyout managers had fallen 36%.
The one-year return for venture capital was 13.5%, according to National Venture Capital Association and Cambridge Associates. The private equity return for the year ended Dec. 31 was 19.86%, according to Cambridge Associates.
Now that private equity managers are subject to fair-value reporting, returns move in the same direction as the public markets. The difference is that private equity moves only half of the way, either up or down, as the stock market, Mr. Robertson said. This is due to the way private equity managers value their portfolios, he added.
At the same time, fundraising across all private equity sectors was miserable.
“Private equity had the lowest fundraising year in a long time,” he said, referring to Dow Jones LP Source, which indicated fundraising in 2010 declined 16% to $86.3 billion.
“Last year was a chicken-and-egg syndrome; good tenured general partners didn't want to come to market because they didn't think limited partners were ready to invest. Limited partners couldn't find a large volume of experienced GPs (general partners) to commit to,” Mr. Robertson explained.
What's more, private equity managers felt they had to distribute profits back to investors before they could ask investors for more capital, he said.
The top private equity manager for the year was J.P. Morgan Asset Management, with $10.4 billion in private equity, up 34% from last year. Following were Oaktree Capital, up 21% with $5.87 billion, and ING, up 2.5% to $5.52 billion.
REIT assets also increased this year. Cohen & Steers Capital Management Inc. was one of the big gainers, with REIT assets up 37% to $5.1 billion. The increase was due to positive net flows and market appreciation, said Anthony Ialeggio, New York-based senior vice president, director of global marketing at Cohen & Steers, in an e-mail.
“Generally, flows came from institutional separate accounts as well as subadvisory mandates for both U.S. and non-U.S. investors as they continued the trend of adding liquidity to their (real estate) portfolios,” Mr. Ialeggio said.
Other REIT managers in the top three were Morgan Stanley, whose assets grew 26% to $6.7 billion, keeping it firmly in first place on the ranking, and Invesco, whose assets rose 31% to $4.73 billion.