A global survey of large institutional investors has found that investors want to work with fewer alternatives managers, by developing key relationships and selecting managers rigorously.
The research was conducted by UBS Fund Services and PwC. UBS Fund Services head, Mark Porter, commented: “Institutional investors are demanding more transparency and increased liquidity from their alternative asset managers. With institutional money now accounting for 80% of the hedge fund industry, for example, they will continue seeking greater transparency over how performance is achieved and how risks are managed, leading to increased due diligence requirements for alternative managers.”
Another finding was that technology would be more important for investors when selecting alternative asset managers. One reason here is the need to comply with new regulatory requirements which will increase demand for real-time data from managers.
PwC Partner, Olivier Carré, said: “The evolving regulatory environment creates opportunities for alternative managers who can be creative in offering clients solutions rather than products. Such solutions will require greater expertise in client servicing and technological acumen.”