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Assets under management (AUM) for the big alternative asset managers in Europe surged in 2021 — and, even as markets tumble, Moody’s Investors Service sees more growth ahead.

In a research note, the rating agency reported that the major European alt managers saw their combined AUM grow by 23% in 2021 to €477 billion — noting that they have now almost doubled their assets over the past five years.

“Rising AUM drove higher management and performance fee income,” it said, adding that expenses grew more slowly than revenues.

Management fee income rose by 35% to over €4 billon, Moody’s reported.

At the same time, operating costs grew by 29% to about €2 billion, leaving over €2 billion in operating income.

Looking ahead, Moody’s expects continued strong investor demand for alt investing strategies to drive further growth in AUM and revenues in the year ahead.

“Given the investor appeal of alternative assets’ typically higher returns, we see scope for further AUM and revenue growth in 2022,” said Dominic Simpson, vice president and senior credit officer at Moody’s, in a release.

While market performance may suffer amid ongoing inflation and geopolitical concerns, this may not dent demand for alt strategies too much, Moody’s noted in the report.

“More difficult macroeconomic conditions could dampen performance fees this year, but tougher markets may make alternative assets more attractive,” it said.