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Breakdown of Investment Consultants with Largest Assets under Advisement – June 2015

by Matthew Rautionmaa

  • 15 Jun 2015
  • PE
  • HF
  • PD
  • RE
  • INF

There are currently 432 investment consultants on Preqin’s Investor Intelligence database that advise investors on alternative assets. Investment consultants provide investors with valuable resources and exposure when trying to gain traction in the alternatives field, utilizing their expertise to aid investment decisions. The table below lists the 10 largest investment consultants by the amount of alternative assets under advisement; in analyzing this data we reveal the characteristics and trends of the industry’s top consultancy firms. 

Although US-based firms make up the vast majority of the 10 consultants listed, the firm with the largest amount of alternative assets under advisement is UK-based Albourne Partners, which advises on $400bn of alternatives. To appear in the current top 10, a firm needs to be advising on at least $55.4bn of alternative assets, with US-based NEPC in tenth place. Of these top 10 firms, four provide advice on more than $100bn worth of alternative assets, with only one firm advising on more than $250bn. 

The nature of the services provided by these firms reveals an expected trend. Seven out of the top 10 firms advise their clients through both discretionary and non-discretionary accounts, while the remainder only offer non-discretionary services to their clients. This detail may suggest that offering clients an option of how their accounts are serviced via non-discretionary paths is more beneficial, since consultants are not limiting possibilities and there remains an element of choice for the investor. Albourne Partners, with the largest value of alternatives under advisement, only offers non-discretionary services to its clients. 

For the top 10 firms, the largest three strictly advise on alternative assets only, while the majority of the other firms advise on a mix of traditional and alternative asset classes. This suggests that the largest players in alternative asset consulting excel by specializing in alternatives, rather than by diversifying across more assets. In fact, two of the top three firms in the table are also the only consultants that cover just two alternative asset classes, with the rest covering three or more. Despite advising on the fewest number of asset classes within the top 10, the US-based firms Hamilton Lane and Townsend Group advise on $221bn and $170bn of alternative assets respectively. Investors may be more inclined to use investment consultants with a more in-depth and specialist knowledge, in theory benefitting from the increased specialization of the asset class. 

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