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Private markets have ‘unique opportunity’ to challenge traditional markets

Private markets have ‘unique opportunity’ to challenge traditional markets

20 December, 2022

Private markets have a ‘unique opportunity’ to accelerate capital deployment from traditional markets to alternative assets as global economic conditions worsen, Ocorian, the global diversified financial services group, predicts.

Growth in the year ahead will focus on pure private market investments, and a shift towards multi alternative asset strategies. Ocorian also forecasts an increased focus on distressed asset funds which will be longer term and closed ended.

Alternative assets are growing in popularity as they offer the potential for attractive yields and low correlation to economic conditions such as interest rates and inflation, unlike bonds and equities.

However, the sector needs to speed up on standardisation and tokenisation to match traditional markets. Ocorian estimates the sector has up to 18 months to achieve what traditional markets have done in 12 years in this area.

Ocorian is seeing growth in private markets reflected in planned fund launches – its analysis* shows more than 1,170 private funds are raising capital across the major jurisdictions. Around 600 are based in Luxembourg compared with 226 in Ireland, 193 in the UK, 83 in Guernsey and 71 in Jersey.

That represents huge growth this year which has seen around 226 new funds domiciled across the same jurisdictions with 121 in Luxembourg, 44 in Ireland, 37 in the UK, 14 in Guernsey and 10 in Jersey*.

Richard Hansford, Head of Business Development – UK at Ocorian said: “The whole investment thesis and the investment life cycle is changing. Investors are willing to commit capital for longer and see greater value in private assets, which is driving growth. Investors increasingly believe it will be some time before we see  growth in traditional markets.

“Luxembourg is  clearly the biggest in terms of private asset market activity, and that trend will continue, demonstrating the preference for managers to have onshore EU structures in the private market space, which applies very much to US managers wanting to expand in the European Union.

“At Ocorian we have major growth ambitions and are looking to grow our workforce, so we have data specialists and capabilities in tokenization. Our industry does have to catch up. The private market space and the alternative space is definitely deficient in standardisation.”

Tokenisation of private markets will enable participants to address growing demand from institutional investors while standardisation of data will help drive expansion by enabling private markets to match traditional markets on transparency.

Ocorian fund services

Ocorian was recently granted three new licences by the Central Bank of Ireland, making it one of just a few non-bank providers based in Ireland able to offer a full range of services for a wider range of clients. It has licences covering Alternative Investment Fund Management (AIFM) services, fund administration services and real asset depositary services.

As a private capital specialist and global leader in providing AIFM, fund accounting & administration, and depositary services, Ocorian can provide asset managers with a quick, cost-effective, and compliant way to realise their fund projects. Ocorian takes care of the regulatory and operational burden of establishing and administering our clients’ alternative investment fund (AIF) throughout its lifecycle.

Ocorian’s third-party ManCo/alternative investment fund management (AIFM) services based in Luxembourg and Ireland provide a quick, cost-effective, and compliant way to realise fund projects, including cross-border distribution. Its expertise spans all alternative investment asset classes including private equity, venture capital, infrastructure, real estate, debt, as well as funds of funds.

Please note that this press release is intended to provide a very general overview of the matters to which it relates and is provided for your convenience. It is not intended as legal or investment advice and should not be relied on as such.