Macquarie Group Ltd, AMP Limited, Lend Lease Group: Should you buy?

Alternative asset classes are rising in importance.

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At first glance apart from all being amongst the largest listed companies on the ASX there may not appear to be a lot in common between investment bank Macquarie Group Ltd (ASX: MQG), insurer AMP Limited (ASX: AMP) and global property services provider Lend Lease Group (ASX: LLC).

However according to a report by risk manager Tower Watson titled, Global Alternatives Survey 2014, these three leading companies do all share one important trait in common – they are amongst the world’s largest alternative investment managers.

According to the survey, in 2014 total global assets under management (AUM) hit US$5.7 trillion with real estate managers speaking for 31% of those AUM.

Once again Australian companies showed their ability to punch above their weight with at least ten domestic managers finding themselves amongst top ranked participants. The most impressive ranking went to Macquarie Group which topped the list for AUM with US$96 billion, out-classing the likes of global heavyweights such as Bridgewater and Blackstone.

What does this mean for investors?

A review of the survey highlights that both globally focussed firms such as Macquarie and Lend Lease as well as domestic-focussed firms such as AMP and Commonwealth Bank of Australia (ASX: CBA) – which also made the list via its Colonial First State division – control enormous levels of AUM. The increasing demand in Australia and worldwide for alternative asset classes such as infrastructure, hedge funds, real estate, commodities, illiquid credit and private equity is only likely to grow. Particularly as investors like superannuation funds and sovereign wealth funds – look to diversify their assets away from bond and equity markets.

Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

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