Money managers offering both traditional and alternative investment strategies are continuing their push into alternatives, but Pensions & Investments' search and hire data reveal they are not gaining assets as rapidly as firms that specialize in alternative investments.
Alternatives such as private equity and hedge funds, once considered niche investments, now are close to mainstream, with resulting larger allocations. And more recently, some private debt and credit investments have been finding their way into investors' fixed-income portfolios.
Only 6.9% — or 301 of 4,385 alternative investment hires tracked by P&I — were of traditional multiasset class managers between Jan. 1, 2010, and May 15 of this year.
In dollar terms, traditional managers received $33.6 billion of the total of $365.9 billion in alternative investments mandates during the same period.
This analysis is based on P&I reports, which reflect only a fraction of asset owners' investment activity. Among the investment strategies included in the alternative investment categories are real estate, real assets, private equity, hedge funds and active currency.
Blackstone Group raised the most capital during the period, with a combined $19.2 billion from 126 commitments. Apollo Global Management was next, collecting a total of $8.2 billion from 39, followed by TPG Capital LP with $8 billion from 52.
For traditional managers, Neuberger Berman Group LLC garnered the most alternative assets — more than $3.25 billion from 29 commitments during the period. Second was Pacific Investment Management Co., with $2.55 billion from 18, and J.P. Morgan Asset Management with nearly $2.16 billion from 28.
And despite institutional investors' move into alternatives, traditional managers that only recently began offering alternative strategies have not been among the top 10 alternative managers in P&I's annual money manager rankings.
Some traditional firms have remained top managers in alternative investment asset classes, but with slow growth rates. For example, while Morgan Stanley Investment Management has been on P&I's top 10 real estate manager list, it has only gained a bit more than $1 billion in real estate assets since 2004. In comparison, Starwood Capital Group LLC's AUM grew 255% to $12.4 billion in the 10 years ended Dec. 31, pushing it to 10th in AUM among real estate managers.