One reason for the growth is retail investors have become more outcome-oriented since the global financial crisis, which has led them toward multiasset and alternative strategies, Andrea Lisher, managing director and head of U.S. funds at J.P. Morgan Asset Management, New York, and Jeffrey Levi, a director at Casey, Quirk & Associates LLC, Darien, Conn., said in separate interviews.
Ms. Lisher also noted that the success of institutional investing in multiasset and alternatives has spilled over into retail. Asset managers such as JPMAM, BlackRock Inc. and BNY Mellon Corp. have launched several new multiasset and alternatives mutual funds in the past few years to accommodate and fuel retail investors' demand.
Mr. Levi said many institutional investors already have multiasset allocations, while those strategies are still new to many retail investors. There are also more strategies — such as global macro, event-driven and arbitrage approaches — competing with this portion of institutional investors' portfolios.
“Multiasset is an area that's seen significant growth in the retail space as financial advisers use these products as a core part of their portfolio,” Mr. Levi explained.
Kenneth Barbuscio, managing director and head of platform development for New York-based BlackRock Inc.'s U.S. retail division, agrees. “The majority of (multiasset) growth and inflows you've seen is coming from retail clients,” he said.
BlackRock had retail long-term net inflows of $14 billion in the first quarter of this year, including $3.6 billion into multiasset class strategies. That compares to total net institutional inflows of $4.97 billion, including $1.3 billion into multiasset class strategies.
In addition, BlackRock experienced net retail inflows of $16.59 billion and $8.34 billion during its fourth and third quarters of 2013, respectively, while it saw institutional net inflows of $4.8 billion in the fourth quarter of last year and net outflows of $3.31 billion in the third quarter. BlackRock's total multiasset inflows were $17.36 billion in the fourth quarter and $4.86 billion in the third.Three years ago, BlackRock's $208 billion in multiasset AUM — 5.7% of its total AUM at March 31, 2011 — was driven primarily by institutional net inflows of $12.4 billion, while retail and high net worth clients added $2.5 billion.
At year-end 2011, institutional investors represented 63% of BlackRock's $225.2 billion multiasset AUM, while retail and high net worth investors accounted for 37%.
Retail clients “are seeking outcome-oriented investments,” said Mr. Barbuscio. “That's driving interest in multiasset and alternative strategies.”