Traditional asset management groups are racing to expand offerings in alternative investments as they seek to boost profitability and head off competition from private equity giants.
More than a dozen groups known for their mutual and exchange traded funds each reported managing at least $100bn in alternative assets at the end of last year, up from nine groups five years ago. Their ranks include BlackRock, Invesco and PGIM.
They and others are bulking up rapidly, often by acquiring alternative specialists. AllianceBernstein last week announced plans to build its alternative assets to nearly $50bn with the purchase of CarVal Investors, and Franklin Templeton expects to top $200bn after it completes its acquisition of Lexington Partners in April.