Global Outlook 2024 Report

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Managers tip increase in PE and hedge fund inflows in 2024

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Alternative asset, equity and fixed income fund managers have identified private equity, renewable energy and hedge funds as the alternative asset classes most likely to increased inflows in 2024, according to new research by fund management solutions specialist Carne Group.

Private equity was the top choice of asset managers when asked to identify alternative asset classes expected to see the biggest increase in fundraising this year. Just under a third (28%) of fund managers expected PE’s increase to be ‘dramatic’ when compared to 2023, while 50% anticipated a slight rise. Renewable energy meanwhile polled 30% and 31%, followed by hedge funds (27% and 29%).

Almost three-quarters (73%) of 200 fund managers surveyed across the UK, Germany, Switzerland, Italy, France, the Netherlands, Norway, Finland and Denmark, and collectively managing $1.577tn, expect the number of new funds launching within their own sector in 2024 to be higher than the previous year.

Despite waves of market volatility, 14% of fund managers pinpointed a dramatic increase in the number of fund launches this year. Similarly, two-thirds (62%) of fund managers anticipate the number of segregated accounts launched in 2024 to be higher than the previous year, with 14% expecting the total number to be significantly higher.

The majority (83%) of those surveyed also expect an increase in the flow of new capital into their funds and segregated accounts this year, with 8% eyeing significant growth.

John Donohoe, CEO at Carne Group, said: “Alternative asset classes have benefited greatly from recent stock market volatility, which has resulted in a desire for investors to diversify their portfolios more.

“Respondents noted that fund managers face a complex regulatory environment with an increasing focus on corporate governance, issues around reporting, fees and expenses as well as operational costs. This means they need to place an even greater focus on improving their levels of efficiency, whilst maintaining the highest levels of transparency and reporting for investors.”

Finally, just under a quarter (23%) of fund managers anticipated a dramatic increase in the use of third-party providers between 2024 and 2026, while 56% expected a slight rise. This shift to incorporating external expertise is attributed to the ability to launch different product sets, speed to market, and the assurance of stronger fiduciary management of the fund.

Donohoe added: “Our survey shows that the expertise of the investment team is the key selling point for asset managers. As complexity and cost pressures mount, managers will focus their efforts on investment management and distribution, and work with third-party providers to enable them to remain lean, agile and competitive.”

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