Global Asset Allocation

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Global asset allocation or Global assets under management consists of pension funds, insurance companies and mutual funds. Other funds under management include private wealth and alternative assets such as hedge funds and private equity. Institutional clients generate the majority of funds.

Assets of the global fund management industry increased 14% in 2007 and doubled from 2002, to reach a record $74.3 trillion [1]. Growth in recent years has largely been due to rising net flow of investment and strong performance of equity markets. Part of the reason for the increase, in dollar terms, has also been the decline in the value of the dollar against a number of currencies.

Global assets under management.

Rank Fund type billions USD Figures as of — Private wealth $ 32,800 1 [1][2] 2008 1 Pension funds $ 24,000 [3] 2008 2 Mutual funds $ 18,900 [2] 2008 3 Insurance companies $ 18,700 [3] 2008 4 Real estate $ 10,000 [4][5] 2006 5 Foreign exchange reserves $ 7,341 [6] February 2008 6 Sovereign wealth funds $ 3,300 [7] 2007 7 Hedge funds $ 1,500 [8][9] 2008 8 Private equity funds $ 1,160 [10] 2007 9 REITs $ 764 [11] 2007

• ^1 Around one third of private wealth is incorporated in conventional investment management (Pension funds, Mutual funds and Insurance assets).
• ^2 Many surveys systematically overestimate the global wealth pool. This is because they fail to separate out assets that are inaccessible for wealth management services (e.g. pension assets, real estate, dedicated liquidity, etc.)^[12]

[edit]References

1. ^ As world wealth increased to $37.2 trillion in 2006
2. ^ ^{a b} International Financial Services - Sources of global assets under management
3. ^ ^{a b} IFSL - Fund Management 2009
4. ^ The Future Size of the Global Real Estate Market
5. ^ The global real estate market is on pace to grow by nearly one half to $13.7 trillion
6. ^ Foreign exchange reserves of the world
7. ^ Sovereign wealth funds grow to $3,300bn
8. ^ 13th Annual Hennessee Hedge Fund Manager Survey
9. ^ International Financial Services - Hedge funds
10. ^ Private equity firms in their portfolios already hold a conservative estimate of $1.16 trillion of equity in companies
11. ^ The total market capitalization of publicly-listed REITs around the world reached US$764 billion, up 25% from the previous year
12. ^ Regaining momentum in wealth management - Roland Berger Strategy Consultants, page 15