Capital allocations to alternative investments by global asset managers jumped to about $144 billion in 2022 from about $130 billion in the prior year, according to a report commissioned by Vidrio Financial released Tuesday.
That $144 billion in new capital was tracked across more than 1,000 individual institutional investor mandates of 50 of the top alternative allocators.
The $130 billion figure from 2021 was tracked across more than 900 individual institutional investor mandates from 50 of the top alternative allocators.
By specific asset classes, inflows into private equity/venture capital slowed to $61.6 billion in 2022 from $64 billion in 2021, while inflows into credit and real estate remained stable at about $27 billion each.
However, inflows into hedge funds jumped to $16.6 billion in 2022 from $8 billion in 2021.
Flows into infrastructure and real assets totaled $7.3 billion and $4.9 billion, respectively, in 2022. Corresponding figures for 2021 were not available.
While allocations to private equity have "slowed slightly," from last year, the report said, interest in private credit interest is "running high" from allocators as well as from fund managers, as many hedge funds and private equity firms are investing in the sector.
Meanwhile, the top individual allocators to alternatives in 2022 were the $233.2 billion New York State Common Retirement Fund, Albany ($13.3 billion in allocation); the $143 billion State of Wisconsin Investment Board, Madison ($13.3 billion); and the $311.5 billion California State Teachers Retirement System, West Sacramento ($12.4 billion).
The top private equity allocators were California State Teachers Retirement System ($8.1 billion); the $181.6 billion Washington State Investment Board, Olympia ($5.2 billion); and New York State Common Retirement Fund ($4.3 billion).
The top credit allocators comprised the $449 billion California Public Employees Retirement System, Sacramento ($4.3 billion); the $63.3 billion Illinois Teachers Retirement System, Springfield ($3.1 billion); and New York State Common Retirement Fund ($2.8 billion).
The top real estate allocators were New York State Common Retirement Fund ($4.1 billion); California State Teachers Retirement System ($3.8 billion); and the $790 billion Abu Dhabi Investment Authority, Abu Dhabi ($2 billion).
The top real asset allocators were Illinois Teachers Retirement System ($1.6 billion); the $96.8 billion Virginia Retirement System, Richmond ($675 million); and the $83.7 billion New Jersey Division of Investment, Trenton ($600 million).
The top infrastructure allocators were Washington State Investment Board ($1.7 billion); the $179.3 billion Texas Teachers Retirement System, Austin ($854 million); and the £38.3 billion ($46.1 billion) Border to Coast Pension Partnership, Leeds, England ($882 million).
Finally, the top hedge fund allocators were State of Wisconsin Investment Board ($8.5 billion); the $38.2 billion South Carolina Retirement System Investment Commission, Columbia ($3 billion); and New York State Common Retirement Fund ($1 billion).
Vidrio is seeing the markets align in the shift away from the 60/40 asset mix, moving towards a more equal mix between public and private investments, said Mazen Jabban, chairman and CEO of Vidrio, in the report. Alternative asset classes are becoming more important for institutional investors "who work to take advantage of illiquidity premiums in the private markets while also seeking greater transparency into these types of investments," he noted.
