Macquarie, ING Top Alternative Asset Managers for Pension Funds

Date: Tuesday, July 7, 2009
Author: Malcolm Scott, Bloomberg

Macquarie Group Ltd., ING Real Estate Investment Management and Morgan Stanley are the three biggest managers of alternative assets for pension funds, according to a survey published by Watson Wyatt Worldwide Inc.

Globally, the 100 largest firms managed $817 billion of so- called alternative assets, including real estate, hedge funds and private equity money, at the end of last year, down about 1 percent from a year earlier, according to the survey.

The asset class weathered the global financial crisis better than equities, which slumped 42 percent last year, as managers prevented significant withdrawals and it attracted interest from investors seeking to diversify their portfolios, the researcher said.

Real estate had the highest number or managers in the top 100, with 37 managers accounting for 58 percent of funds managed. Private-equity fund of funds accounted for 20 percent of the assets, ahead of fund of hedge funds with 13 percent. Infrastructure funds and commodities funds made up the balance.

The U.S. accounts for 53 percent of the pension fund assets invested in alternatives, followed by Europe with 33 percent and Asia with 11 percent, according to the report.

HarbourVest Partners LLC was the biggest private equity fund of funds, while Blackstone Alternative Asset Management LP was the biggest fund of hedge funds, Watson Wyatt said.

Grosvenor, Mesirow

Grosvenor Capital Management LP, Mesirow Financial Holdings Inc., Financial Risk Management Ltd. and BlackRock Inc. round out the top five fund of hedge fund managers.

Assets managed by the top 50 fund of hedge funds shrank by 16 percent in 2008, the survey showed, with the average fund managing about $2 billion in assets as of Dec. 31.

Sydney-based Macquarie topped the overall list with $44.4 billion worth of infrastructure assets managed on behalf of pension funds, Watson Wyatt said.

Alternative assets managed on behalf of pension funds had increased 40 percent in 2007.

To contact the reporter on this story: Malcolm Scott at Mscott23@bloomberg.net