Alternative assets under administration on global high
15 April 2015 Atlanta
Image: Shutterstock
Assets under administration in the alternative fund administration grew by 16.8 percent in 2014, as investors continued to allocate more in the alternatives space, according to eVestment’s Alternative Fund Administrator Survey 2015.
At the end of 2014, survey participants reported assets under administration totalling $6.86 trillion, an increase of 16.8 percent compared to $5.87 trillion reported at the end of 2013.
The total of private equity and real estate fund assets under administration grew by a significant 23.7 percent year-on-year, reaching $1.58 trillion.
Assets under administration in hedge funds increased by 15.5 percent, and those in funds of hedge funds saw a growth of 11.9 percent.
The administrators surveyed estimated that more than 50 percent of private equity and real estate assets were administered in-house, while the vast majority hedge funds and funds of hedge funds were still under in-house administration.
Participants did, however, predict that third-party administration could become more common as regulatory burdens increase.
Although there were varying opinions on the driving forces for mergers and acquisitions, there was a clear consensus that there is a need for a global footprint and for the ability to absorb rising costs of regulatory reporting services.
The most commonly cited trends included price competition, cost pressures for more robust offering, and increasing client desire for operational knowledge.
Many also pointed out that the industry could see more segmentation between those servicing the needs of emerging investment managers and those servicing very large managers.
In terms of growth, administrators were generally more optimistic about prospects in North America and Europe, and expectations for growth in Africa also increased in relation to other regions.
Since the 2013 survey, administrators have seen an evolution towards transparency, towards investors and regulators, but also within institutions. The report predicts that they will now move on from regulation-related offerings to focus on other factors.
Expected key objectives include growth across multiple regions and asset classes; and independent offerings such as depository services and shadow administration.
The survey included information from a broad spectrum of the industry, and from firms of various sizes.
At the end of 2014, survey participants reported assets under administration totalling $6.86 trillion, an increase of 16.8 percent compared to $5.87 trillion reported at the end of 2013.
The total of private equity and real estate fund assets under administration grew by a significant 23.7 percent year-on-year, reaching $1.58 trillion.
Assets under administration in hedge funds increased by 15.5 percent, and those in funds of hedge funds saw a growth of 11.9 percent.
The administrators surveyed estimated that more than 50 percent of private equity and real estate assets were administered in-house, while the vast majority hedge funds and funds of hedge funds were still under in-house administration.
Participants did, however, predict that third-party administration could become more common as regulatory burdens increase.
Although there were varying opinions on the driving forces for mergers and acquisitions, there was a clear consensus that there is a need for a global footprint and for the ability to absorb rising costs of regulatory reporting services.
The most commonly cited trends included price competition, cost pressures for more robust offering, and increasing client desire for operational knowledge.
Many also pointed out that the industry could see more segmentation between those servicing the needs of emerging investment managers and those servicing very large managers.
In terms of growth, administrators were generally more optimistic about prospects in North America and Europe, and expectations for growth in Africa also increased in relation to other regions.
Since the 2013 survey, administrators have seen an evolution towards transparency, towards investors and regulators, but also within institutions. The report predicts that they will now move on from regulation-related offerings to focus on other factors.
Expected key objectives include growth across multiple regions and asset classes; and independent offerings such as depository services and shadow administration.
The survey included information from a broad spectrum of the industry, and from firms of various sizes.
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