The asset management industry is set to experience strong growth and a higher number of fund and segregated account launches in 2024, with a marked trend towards outsourcing and a focus on private equity, renewable energy and hedge funds, announced Carne Group in a report published on Tuesday 6 February. Despite growing market volatility, over 200 alternative asset, equity and fixed-income fund managers across 10 countries, overseeing a collective $1.6trn in assets, maintained a positive outlook for growth in 2024. Capital flows into funds and segregated accounts are expected to rise in 2024, with 83% of fund managers forecasting an increase, and 8% expecting this growth to be substantial.
This optimism extends to the initiation of new funds and segregated accounts, with 73% of managers predicting more fund launches compared to 2023, and 14% foreseeing a dramatic rise. Segregated account launches are also expected to increase, with 62% of managers forecasting a rise over the previous year.
Carne Group, a global fund management solutions provider with a strong focus on fund regulation and governance, highlighted a particular focus on alternative asset classes, with private equity, renewable energy and hedge funds poised to see the largest influx of fundraising in 2024. Expectations for dramatic fundraising increases in these sectors are notable, with 28%, 30% and 27% of managers, respectively, predicting significant growth.
John Donohoe, CEO at Carne Group, attributed the buoyancy in alternative asset classes to their resilience amid stock market fluctuations, driving a diversification trend among investors. He noted that 82% of fund managers expect market volatility to escalate in 2024, yet remain confident in attracting further capital due to the perceived stability of alternative assets.
“Respondents noted that fund managers face a complex regulatory environment with an increasing focus on corporate governance, issues around reporting, fees and expenses as well as operational costs. This means they need to place an even greater focus on improving their levels of efficiency, while maintaining the highest levels of transparency and reporting for investors,” added Donohoe.
A significant shift towards external expertise is anticipated, stated the report, with 23% of those surveyed expecting a major increase in the use of third-party management companies by 2026. The primary motivations for outsourcing include launching diverse product sets, accelerating time to market and ensuring robust fund fiduciary management, said Carne.
Donohoe, in his concluding remarks, emphasised the critical role of investment team expertise in the current environment, with fund managers prioritising investment management and distribution while seeking specialist external support for areas like regulatory compliance and product launches.
The survey was conducted in December 2023 and January 2024. Carne Group employs over 700 staff worldwide and oversees more than $2trn in assets under management.