A new research from Carne Group reveals that alternative asset classes are set to see the biggest increase in fund raising in 2024, with private equity, renewable energy, and hedge funds expected to lead the way.
The recent survey of over 200 alternative asset, equity, and fixed income fund managers in 10 countries, collectively managing $1.6 trillion, found that private equity came top, followed by renewable energy, hedge funds, private debt, and real estate, as the top five asset classes expected to see the biggest increase in fund raising in 2024.
According to the global study, a significant majority of wealth managers and institutional investors, who collectively manage $1.7 trillion in assets, anticipate increasing their allocation to private equity by 10% or more in 2024. Similarly, 70% of respondents expect to increase their allocation to private debt. The study also found that 64% of respondents plan to increase their allocation to renewable energy, 49% to real estate, and 42% to hedge funds.
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 asset classes amongst investors is increasingly rapidly, fuelled by a growing desire from investors to diversify their portfolios and to manage volatility,” John Donohoe, CEO at Carne Group said.
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, the Carne Group’s added.
About the Research
The research was conducted by Carne Group, a fund regulation and governance solutions for the asset management industry, in partnership with Pureprofile, a market research company. The survey was conducted in December 2023 and January 2024, and included over 200 senior executives working for fund managers in 10 countries, as well as 201 investors working for pension funds, family offices, wealth managers, insurance asset managers, and consultants to institutional investors and asset managers.
