KPMG has bought together its hedge fund, real estate and infrastructure businesses into an Alternative Investment Group in a move designed to respond to the needs of a rapidly evolving market and to pave the way for rapid growth of the business over the next few years.
The alternative investment industry is at a turning point, according to Tony Rocker, head of the new KPMG alternatives group, who says: 'The demand for assets and investment opportunities means the barriers between traditionally separate sectors are breaking down.
'Hedge funds and private equity groups are increasingly looking at investing in physical assets such as real estate and infrastructure. Both these sectors are experiencing tremendous inflows of capital from institutional investors seeking investment performance.'
The newly-formed group includes staff from KPMG's corporate finance, tax, transaction services, audit and advisory practices. 'We expect to quadruple our business in this area within three years,' Rocker says. 'This is an exciting time in the capital markets. In infrastructure in particular, demand for assets outstrips supply.
'While we see the potential for a minor price correction in the more mature markets, new growth opportunities exist in the US, Canada and Europe to fuel demand, and the definition of infrastructure is being stretched ever further to create investment-grade product.'
Adds Tom Brown, a KPMG partner and the newly-appointed head of the firm's European hedge fund business: 'As our hedge fund clients start to move into new and exciting investment areas, so we must follow.
'The permanent capital created by longer lock-ups and listing hedge fund vehicles opens up a vast array of investment opportunities for hedge funds, which are beginning to look seriously at longer-term assets.'