Alternative fund managers expect a dramatic rise in inflows from pension funds and private banks over the next 18 months
Inflows from pension funds predicted to rise
The fund management industry has endured a difficult period, with fewer funds launched and the amount of capital raised at some of the lowest levels seen for years.
However, new research from Ocorian – a global financial services provider and leader in alternative fund administration – shows almost nine in 10 alternative fund managers (87%) predict that inflows into alternatives from pension funds will increase over the next 18 months. And almost two fifths of these (36%) expect a dramatic increase.
More than eight in 10 (81%) expect levels of fundraising to be higher over the next 18 months compared with the previous 18-month period.
The majority (69% of fund managers) are cautiously optimistic, stating they are expecting to see a slightly higher level of fundraising, while 12% believe it will be dramatically higher.
The study from Ocorian, which manages more than 15,000 structures on behalf of 6,000+ clients globally, also looked at which jurisdictions will increase in popularity for alternative fund managers targeting European investors over the next 18 months.
It found strong support for Jersey and Guernsey, with 36% of alternative managers expecting an increase in the use of the Channel Islands to domicile structures targeting European investors.
Alternatives to be popular with private banks
Ocorian’s study of alternative fund managers across the UK, US and Europe found almost three quarters (72%) expect inflows into alternatives from private banks to increase over the next 18 months, with 33% expecting these to increase dramatically.
Meanwhile, six out of 10 (61%) expect inflows into alternatives from corporates to increase over the next 18 months, with 34% expecting dramatic increases.
Ben Hill, Co-Head of Fund Services at Ocorian, says: “Our research shows that alternative asset managers are feeling very optimistic about the next 18 months, with increasing levels of inflows across all sectors – in particular from pension funds, private banks and corporates who want to gain exposure to the benefits that alternatives can bring – helping lower volatility, enhance returns and increase diversification.
“These inflows come with additional operational demands, with investors requesting automation, more bespoke reporting, and greater transparency.
“These additional requirements can stretch the operational teams within alternative asset managers, leading them to turn to firms such as Ocorian to support their evolving needs and to handle their growing operational complexities.”
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