Alternative Fund Managers Optimistic About Outlook – Survey
New research from Ocorian, a global specialist in corporate and fiduciary services, fund administration and capital markets, shows that alternative fund managers are optimistic about launches and fundraising over the next 18 months.
Despite a challenging economic environment, more than eight in 10 fund managers say that levels of fundraising will be higher over the next 18 months compared with the previous 18-month period, new research released this week by Ocorian reveals. The firm is a global provider of services to financial institutions, asset managers, corporates, and high net worth individuals. It works with more than 60 family offices around the world.
According to Ocorian, 69 per cent of fund managers are cautiously optimistic, stating that they are expecting to see a slightly higher level of fundraising, whereas 12 per cent believe that it will be dramatically higher.
These results are reflected in the confidence of fund managers to launch new funds, the firm continued. Almost all are confident in the ability of alternative fund managers to successfully launch new funds in the next 18 months, with 52 per cent being very confident and 46 per cent being quite confident.
Ocorian commissioned independent research company PureProfile to interview 100 alternative fund managers across real estate, private debt, private equity and infrastructure during April 2023. The respondents were from the UK, the US, France, Germany, the Netherlands, Sweden, Switzerland, Finland and Norway.
The research shows that 91 per cent of alternative fund managers predict that there will be more alternative asset fund launches this year compared with 2022. Of these, 28 per cent predict that there will be significantly more alternative asset fund launches while 63 per cent expect launches to be slightly higher. Around 8 per cent believe that it will be about the same, and 1 per cent think it will be lower, the research shows.
In addition, 96 per cent predict that more capital will be raised in 2023 compared with last year. Around two out of five of those surveyed think that there will be over 25 per cent more capital raised this year compared with last year, and a further 39 per cent think there will be between 10 per cent and 25 per cent more, the research reveals. Around 17 per cent believe there will be up to 10 per cent more.
When asked to pick the top five asset classes that alternative fund managers expect to benefit the most from fundraising over the next 18 months, 73 per cent selected private equity, followed by infrastructure, real estate, private debt, and hedge funds. On how fundraising will change in the next 18 months for certain alternative asset classes when compared with the last 18 months, real estate, private equity and private debt are expected to increase the most, the firm said.
Paul Spendiff, head of business development, fund services at Ocorian, said: “2022 was a tough year for the fund management industry, with the number of funds launched and amount of capital raised hitting the lowest levels we’ve seen for many years.”
“While it’s still a challenging economic environment and with a number of geopolitical issues making fundraising more difficult in some markets, it’s encouraging to see how positive alternative fund managers are feeling about the year ahead, predicting both higher levels of fund launches and more capital being raised overall,” he added.
“Despite not being out of the woods yet, we expect to see high performing fund managers with the right strategy, good governance and a transparent approach around ESG will benefit from the improving sentiment in the market,” Spendiff said