European alternatives sector hits €1.62 trillion

The European alternatives industry has hit €1.62 trillion in assets despite the macroeconomic trends for the continent, according to Amundi Asset Management and analytics and data provider, Preqin.

Although hedge funds remain the largest part of the European alternatives market (€608bn), assets under management (AUM) across the sector declined in the past 12 months, leaving private equity poised to overtake as the largest assets class in the region (€559bn).

According to Preqin’s chief executive, Mark O’Hare, Europe’s alternative assets industry was very diverse in terms of assets classes and the different regions and countries across continent.

“With more than 6,300 fund managers and 3,000 investors active in Europe, it is more important than ever to shed light on the incredible array of opportunities present throughout the region,” he said.

“Europe’s alternative assets industry is in rude health, with assets under management surging even as the wider financial picture remains cool.”

Following this, the UK remained the largest market by far, with fund managers based in the country holding €948bn. Also, 2018 saw the country match 2015 in terms of activity levels, reversing a decline seen in the wake of the Brexit vote.

Additionally, 2018 saw record deal values for private equity buyout, venture capital and infrastructure transactions in Europe and, as a result, total private capital deals reached a record €375bn.

“The continued growth of the European alternatives industry demonstrates the vital role that insurance companies, pension funds and asset managers such as Amundi provide in funding the real economy, while Europe’s small and medium enterprises have never had such a diverse range of solutions when considering their capital structure,” Pedro Antonio Arias, global head of real and alternative assets at Amundi, said.

“The benefits for our clients are obvious, with real assets in particular allowing pension funds and insurance companies to capture an illiquidity premium while still delivering superior and predictable returns with a diversified portfolio.”

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