Current stats on alternative investments

The FT/Towers Watson survey of the alternative assets provides good overview of the strength of the industry. The overall industry has pushed beyond $6 trillion dollars, but the growth has come through a change in the composition of the industry. More than 50% of the industry is being held by the top 100 managers. The industry is going to be controlled by the big managers and the start-up is going to continue to have problems gathering assets.

What is also clear is that alternative investments are not the same has hedge funds. The alternative investment area is still dominated by private equity and real estate. Direct edge funds and fund of funds is still only 30% of the total. Pension and insurance funds are still the largest investors and hold  just over 40% of the total with North America still the dominate place for investors committing capital.

Managers have to realize that the competitive landscape is much broader than just managers in the a specific hedge strategy space. Hedge fund managers at a high level have to compete against private equity and real estate to truly prove their worth.