Grace Ashiru
Alternative fund managers are projecting a significant increase in inflows from pension funds in the coming months, underscoring a growing interest in alternative investments for retirement portfolios.
A recent study by Ocorian, a leading provider of entity administration and alternative fund services, surveyed 100 alternative fund managers from the United Kingdom, the United States, and Europe. The findings reveal that 36% of respondents anticipate a dramatic rise in investments from pension funds, while a staggering 87% predict an overall increase in inflows into alternative investments from this sector.
The research sheds light on the increasing appeal of alternative investment strategies for pension funds, which have traditionally favored more conservative approaches. These funds now recognize the potential benefits of diversification, enhanced returns, and reduced volatility offered by alternative investments.
The study also indicates that alternative fund managers expect increased inflows from other sectors. Approximately 72% of respondents foresee a rise in investments from private banks, with 33% expecting a significant increase. Moreover, 61% of managers predict heightened investments from corporates, with 34% anticipating a dramatic surge.
A comprehensive table presented in the study outlines the projected changes in inflows into alternative investments over the next 18 months across various sectors, including pension funds, sovereign wealth funds, insurance companies, funds of funds, family offices, high-net-worth individuals, corporates, retail investors, private banks, and insurers.
In addition to expecting increased inflows, alternative asset managers express optimism about the availability of attractive investment opportunities in the coming years. A remarkable 93% of respondents believe these opportunities will expand, with 17% predicting a dramatic increase. Only 5% anticipate stagnant levels, while a mere 2% foresee a slight decline.
Commenting on the findings, Paul Spendiff, head of business development: global funds at Ocorian, stated, “Our research indicates that alternative asset managers are highly optimistic about the next 18 months, with increasing levels of inflows across all sectors, particularly from pension funds, private banks, and corporates seeking to benefit from the advantages that alternative investments can bring.”
As institutional investors increasingly embrace alternative investments, the surge in inflows necessitates greater transparency, customized reporting, and detailed asset-level information. Alternative asset managers are turning to firms like Ocorian, which possesses extensive experience in alternative fund services, managing over 15,000 structures for more than 6,000 global clients. Ocorian is well-positioned to assist asset managers in meeting these evolving demands.
Conducted in April 2023, the study by Ocorian in partnership with independent research company PureProfile included alternative fund managers specializing in real estate, private debt, private equity, and infrastructure. Fund managers from the UK, US, France, Germany, Netherlands, Sweden, Switzerland, Finland, and Norway participated in the research.
