“The revenue perspective is the motivation for many alternative managers, which is one of the reasons you saw Blackrock buy GIP and you see a lot of traditional managers looking to pivot, acquire or start alternative products.”
With the $US12.5 billion acquisition of GIP, BlackRock is positioning itself as a formidable player in alternative investments alongside its more traditional money management arm. GIP’s Australian outpost, which invests in assets like Sydney Airport, could secure a $100 million windfall from the buyout.
Mr Darke said other asset allocators would take notice.
“Especially across private credit and hedge fund products, there’s massive demand and interest,” he said. “The macro-environment has some very bullish tailwinds for alternatives.
“Family offices, ultra-high net worth individuals, retail investors and even some private corporate pensions, they are under-allocated … Australian investors in those segments will look to allocate more to alternatives, and globally less-sophisticated investors will allocate more too.”
Navigator Global Investments owns interests in a variety of alternative asset managers in Australia and overseas, deriving its revenue from the dividends and distributions generated from these funds. Mr Darke formally came onboard in October, and raised $302 million in equity two months later.
Navigator backs managers with $US74 billion in assets under management.
Mr Darke aims to “expand the portfolio prudently” and diversify its presence because Navigator is heavily focused on private credit and more liquid alternative assets.
“Navigator doesn’t really have a presence in private equity, secondaries, infrastructure and real assets or distressed credit except in a few small buckets,” he said.
“There are a lot of opportunities to diversify and make the fee streams more resilient – that’s a goal for the longer term. In the short term, it’s about how we can organically grow our underlying existing managers,” Mr Darke said.