Alternatives Growing Twice As Fast As Traditional Investments

With every alternative asset growing in the recent past, global assets under management of alternatives grew at an annualized 10.7% between 2005 and 2013, which is twice the rate of traditional investments, notes a McKinsey study.

After surveying nearly 300 institutional investors managing $2.7 trillion in total assets, Pooneh Baghai, Onur Erzan and Ju-Hon Kwek of McKinsey in a report titled: “The $64 trillion question: Convergence in asset management” point out that alternatives have enjoyed this growth at a time when their returns have generally lagged behind the broader market indexes.

Boom in alternative investments

According to the McKinsey report, every alternative asset grew, especially direct hedge funds, real assets and retail alternatives sold through registered vehicles like mutual funds and...