Within the last five years, the assets under management of the 500 largest asset managers have increased by 19 percent in total and thereby by about 3.5 % per annum. Within the last twelve months, however, assets under management have decreased by 1.7 percent to 76.7 trillion USD, shows a study pursued by „Pension & Investments“ and Willis Towers Watson. While the biggest part of actively managed assets (79.3%) has fallen by just 2.8 percent, the money invested in passive products has decreased by 5.5 percent.
With on exception, investors remain invested in similar assets. Traditional asset classes such as equity and bonds still account for about four-fifths of total assets despite a decrease by 7.1 percent. While 45.5 percent are invested in shares (-9.3), 32.8 percent are invested in bonds (-5.5%). Investments in real estate have decreased to the largest extend by 13.2 percent and now account for two percent of total assets.
While investors have pulled money out of all other asset classes or lost part of their investments, the amount of money invested in alternative investments has increased by 25 percent. However, due to the small amount previously invested in alternatives, they still account for just 4 percent of the total wealth. Institutional investors are increasingly using this asset class to diversify their portfolio and increase their returns, says the study. It can be used to gain attractive illiquidity premiums while avoiding low interest rates and market betas.
Internationally, the average portfolio of a pension fund holds about 27 percent of alternative assets and real estate, shows another study pursued by Willis Towers Watson. Due to stricter regulation and therefore a higher share of bonds of up to 60 percent, German pensions funds hold only 13 percent of these assets.