The investable assets of institutions in Asia, excluding Japan, exceeded $10 trillion (€7.4 trillion) in 2012, according to new research, and are estimated to reach $17 trillion by 2017.
The report by research firm Cerulli Associates suggests assets at these institutions will grow by an average of 10% a year, with assets at Southeast Asian institutions rising even faster because they start from a low base.
As they grow in size, Asian institutions are likely to invest a greater proportion of their assets in alternative asset classes, providing an opportunity for managers of private equity, real estate and infrastructure funds, says Cerulli.
Average allocations to alternatives are less than 10% at the moment, says the research, meaning there is room to grow.
"Managers that start engaging institutions early – even when the latter are not ready to allocate to alternatives – will stand a better chance of winning mandates when an institution is ready to invest," says Cerulli senior analyst Chin Chin Quah.
Deregulation is opening up opportunities for Asian institutions to expand their asset management activities, found the research. In China, recent deregulation means insurers can now set up fund management units.
"It could be a way for global fund houses to participate in China's retail and institutional markets if they are able to team up with the right local insurers," says Ken Yap, Singapore-based director and head of Asia Pacific research at Cerulli.
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