Strategic review Alternative investment market
Man is an independent and global leader in alternative investments, providing
innovative products and tailor-made solutions for private and institutional clients.
Man has always focused its Asset Management activities exclusively on alternative
investments and our track record stretches back two decades. The strength of this
track record is critical in an industry whose central goal is to provide diversification
away from traditional equity and bond investments.
The part played by alternative investments in asset allocation strategies looks
set to grow in the decades ahead. Today, a flourishing community of private and
institutional investors look to established managers capable of delivering superior
risk-adjusted performance whether markets are rising or falling.
Alternative investments provide a separate source of return
to traditional investments such as cash, bonds and equities. Recognition of the
advantages of alternative investments has led to a rapid expansion of the various
alternative asset classes. Current estimates suggest that over $600 billion is
invested in alternative assets (excluding private equity and real estate). As
can be seen in the chart to the left, alternative assets were up 15% in 2002,
having grown at over 20% per annum over the last 12 years.
31 December 2002
US$ bn
World Bond Markets
38,000
World Equity Markets
20,000
Total
58,000
Source: Merrill Lynch and Federation of Stock Markets
Whilst this growth is impressive, the sums invested represent under 2% of the
world’s liquid assets of $58,000 billion, suggesting that there is room
for continued strong growth.
Man is well placed to take advantage of this structural shift
in global asset allocations. We have been managing and structuring alternative
investment products since 1983, during which time we have been continually enhancing
both our product range and building global distribution. Man’s development
and approach to business has always been guided by the needs of clients. Our success
in meeting the requirements of the marketplace is built on a firm foundation of
experience, creativity, specialisation, and a robust approach to investment management.
As investors have sought to identify the best alternative investment managers,
institutional and private investors have been primarily attracted to established
businesses with robust business infrastructures and long, solid track records.
Our strong track record and established presence in this industry has allowed
us to grow funds under management rapidly. Excluding the funds under management
in RMF that we acquired in May 2002, we have grown funds at 48% compound per annum
over the last five years, over twice the industry growth rate for that period.
