Alternative asset classes are set to see the biggest increase in fund raising in 2024

Carne Group, following the survey carried out between December 2023 and January 2024 reveals that fund managers expect alternative asset classes to see the biggest increase in fund raising during 2024.

• Private equity and debt, renewable energy and hedge funds expected to see the biggest increase in flows of new capital in the alternatives sector.
• Wealth managers and institutional investors are set to make significant increases in their allocations.
• Alternative asset fund managers face growing regulatory challenges and are focusing more on specialist third parties.

Carne Group commissioned a research with over 200 alternative asset, equity and fixed income fund managers in 10 countries that collectively manage $1.6 trillion, and when asked to select the top five asset classes they expect to see the biggest increase in fund raising in 2024, private equity came top, followed by renewable energy, hedge funds, private debt and real estate.

In a separate global study (carried out with investors professionals from UK, Germany, Switzerland, Italy, France the Netherlands, Norway, Finland and Denmark) with wealth managers and institutional investors including pension funds, insurers and family offices who collectively have $1.7 trillion in assets under management, 71% said they expected the organisation they work for to increase their allocation to private equity by 10% or more in 2024.

Some 70% said this about their allocation to private debt:

However, a big challenge for alternative fund managers is an expected increase in consolidation in their markets driven by fund raising challenges and increasing regulatory costs. Over the next five years, 84% of fund managers surveyed expect the level of consolidation in the real estate fund management sector to increase, and the corresponding figures for the private equity, private debt and hedge fund sectors are 69%,64% and 68% respectively.

The appetite for alternative assets classes amongst investors is increasingly rapidly, fuelled by a growing desire from investors to diversify their portfolios and to manage volatility.

However, the challenges facing alternative fund managers around growing regulatory complexity makes it more difficult for them to capitalise on increased investor appetite for their funds. This is leading to a significant increase in alternative fund managers outsourcing functions to specialist third parties to help them tackle these issues.

John Donohoe, CEO at Carne Group