Global alternative investment industry is now overseeing a record US$6.16 trillion in assets under management, of which US$600 billion were added during the year of 2013, according to data released by research firm Preqin.
During the year of 2013, alternative investment management industry, which includes private equity, hedge fund, real estate and infrastructure fund managers, is characterized by improvements on all aspects of the business: better exit environment, strong performance and increased fundraising levels.
"The alternative assets industry is now valued at over US$6 trillion…and all signs indicate this figure will continue to grow," says Mark O’Hare, CEO of Preqin. "The alternative assets industry has continued to demonstrate it can offer superior long-term risk-adjusted performance for investors, as well as offering key diversification opportunities or reducing volatility."
Specifically, total private equity assets, which includes private equity, private real estate and infrastructure funds, stood at US$3.5 trillion as of June 2013, up from US$3.2 trillion as of June 2012.
The hedge fund industry saw total asset under management grew to US$2.66 trillion in 2013 from US$2.30 trillion the year earlier, as a result of strong investment gains and new asset inflows.
Hedge funds posted average returns of 11.08% over the course of 2013, compared with S&P 500 Index’s 30% jump during 2013.
Private real estate fund assets reached US$657 billion as of June 2013, up from US$576 billion as of June 2012.
Real estate posted average returns of 13.7% during the three year period until June 2013, slightly beating the average 13.6% return of listed equities.
Private infrastructure funds’ total assets stood at a record high of US$244 billion as of June 2013, up from US$210 billion a year earlier.