Demand for Alternative Asset Fund Quotes Remains High Despite Volatility – Fund Management/ REITs

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New research* from diversified financial services group Ocorian shows that institutional investors are still confident about demand for alternative asset fund quotes over the coming year, as long as the funds are heavily weighted towards the ESG.

Research from the leading fund administration service provider found that more than three in four (78%) institutional investors focusing on the alternative sector expect fund pricing to rise this year and next year. next.

More than a quarter (28%) of US and UK alternative-focused institutional investors predict a dramatic increase in fund listings with only 15% confident that the number of listings will decline given the current macro and stock market environment volatility, rising interest rates and inflation plus the war in Ukraine.

However, the results of the study with investors focused on real estate, private debt and infrastructure underscore the need for a strong ESG focus for any fund considering listing. Around two in five investors (40%) surveyed strongly agree that it will become more difficult to successfully list funds without considering ESG, while 51% slightly agree. Only nine percent are convinced that ratings can be done without focusing on ESG.

The growing attention to ESG issues in listings may help explain why some alternative asset managers will seek to raise funds privately rather than listing them. About 84% of investors surveyed expect hedge fund managers to raise more funds privately over the next 18 months. Only 13% do not expect an increase in private fundraising.

The main reason identified by the research is that raising private funds gives managers access to different types of investors. Institutional investors cited the cost and impact of regulatory changes as the second and third most likely reasons encouraging hedge fund managers to raise funds privately.

Gerry Warwick, Head of UK & Ireland Fund Services at Ocorian said: “Despite current market conditions and growing macroeconomic challenges, confidence in listings is reflected in the pent-up demand we are seeing. The last quarter of this year and next year could be very busy, which may meaning funds that are ready to list sooner could benefit.That said, there are still concerns about listing requirements and this is driving interest in private fundraising.

Ocorian will publish the findings of the report on the 13eOctober 2022, to sign up for this free report, click here.

* Ocorian commissioned independent research firm PureProfile to interview 102 senior executives and fund managers from financial institutions focused on investing in private debt, private equity, real estate and infrastructure in the United States and in the UK in June and July 2022.

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