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Alternative fund managers expect capital raising and fund launch surge

Alternative fund managers expect capital raising and fund launch surge

11 January, 2024
Funds AIFM

Alternative fund managers are forecasting a strong year for capital raising in 2024 at their firms and new fund launches across the industry as investors are increasingly looking to diversify, new research* from Ocorian, a global market leader in alternative investment fund administration, shows.

85% of fund managers predict an increase in capital raising in 2024

Around 85% of private equity, venture capital and real estate fund managers questioned in Ocorian’s global study are forecasting an increase in capital raising by their company next year compared with 2023 with 18% predicting a dramatic increase. Just 1% expect a decrease while 14% expect no change in their capital raising.

The study which interviewed managers in Europe, Asia, the Middle East, North America and the UK found nearly one in three (31%) forecast capital raising at their organisation will increase by 50% or more next year compared with this year.

Their confidence in their own firm is reflected by optimism about the sector as a whole with almost all predicting an increase in the level of fund launches across all major alternative fund asset classes including infrastructure, private debt, venture capital, real estate and private equity.

Drive to diversify is the key reason for bumper 2024

The key reason the study identified driving the confidence about capital raising next year is a growing desire by investors to diversify. Around 68% highlighted diversification compared with 65% who said difficulties and volatility in the fixed-income market is driving increased interest in alternative assets.

Nearly half (49%) say there are now more opportunities for investors in the alternative asset space while 41% believe improved regulation in the alternative asset markets is driving increased interest.

The table below shows what alternative fund managers believe will happen to the level of fund launches across different asset classes in 2024 compared with 2023.

The expected changes in fund launches across different asset classes in 2024 compared to 2023

Yegor Lanovenko, Co-Head of Fund Services at Ocorian, said: “There is a high level of confidence about the year ahead among alternative fund managers both for their own funds and for the sector as a whole, with different regional sentiments emerging."

“For alternative fund managers in the US and Asia in particular, 2024 looks set to see a strong rise in capital raising as well as a surge in fund launches across all major asset classes, driven by investor appetite for diversification and exposure to alternatives, as well as the expectation that inflationary and interest rates environments have peaked."

“This expected surge in capital raising and fund launches turns the spotlight on efficiency and operational excellence, and fund managers increasingly rely on expert support and trusted partners to handle their fund launches and operations at scale.”

About Ocorian Fund Services

Ocorian’s fund services team delivers operational excellence across fund administration, AIFM, depositary and accounting services to the world’s largest financial institutions along with dynamic start-up fund managers and boutique houses. Its team of over 400 funds specialists works across all major asset classes of alternative investment funds such as private equity, real estate, infrastructure, debt and venture capital, whilst its specialist Islamic Finance team is a leading provider of Sharia-compliant investment structures.