Friday, 25 July 2014
Last updated 3 hours ago
Sep 17 2013 | 9:57am ET
Alternative fund managers expect to provide greater transparency, face higher costs due to regulation and launch more hybrid investment vehicles over the next five years, according to a new survey by State Street in cooperation with Preqin.
Of the 391 managers polled in July 2013, 44% said they'd increased the amount of information they report on holdings, risk and performance since 2008 and another 16% plan to do so over the next five years. Almost one third (32%) of respondents have increased their reporting frequency since the financial crisis.
Asked about the burden imposed by stricter regulation, 86% of managers said they expected their costs to increase over the next five years, largely due to increased regulation, but 75% of those are optimistic that this will not constrain their growth potential.
In fact, 29% of the managers polled expect to add new investment strategies with in-house resources over the next five years while 25% have done so since 2008.
The survey also revealed that 18% of managers plan to expand into new regions by 2018; 26% have introduced managed accounts in the past five years and another 18% plan to do so by 2018; and a full 58% expect to see an increase in hybrid alternative fund structures, blending the features of traditional hedge fund and private equity vehicles, over the next five years.
In addition, 10% of fund managers plan to acquire another business between now and 2018 (7% have done so in the past five years).
“This survey highlights key changes that are coinciding with the growth and maturation of alternatives as an asset class and offers a glimpse into what the next five years will look like for the industry,” continued Sullivan. “Managers who remain innovative as they respond to demands from investors will be positioned for success in this new era where investors will look to employ alternatives more commonly than ever before.”
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…