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Alternative fund managers deliver value in volatile financial markets

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Jeff Short, Wealth and Asset Management Leader, EY Region of the Bahamas, Bermuda, British Virgin Islands and Cayman Islands (Photograph supplied)

The majority of investors surveyed in an EY survey believe alternative asset fund managers are delivering value in volatile financial markets through positive short-term performance and promising long-term positioning.

Three-quarters said their fund managers had met or exceeded expectations, according to EY’s 2022 Global Alternative Fund Survey.

Also determined in the study is that managers face pressure to seek growth and market differentiation through new product development, while talent management and the addressing of gaps in regulatory compliance infrastructure are priorities.

The survey Can resilience shape a shifting landscape? is the latest edition of the annual survey, providing insight into trends driving the industry through the perspectives of both alternative fund managers and the institutional investors who allocate capital to them.

The report provided a basis for discussion among the asset management industry professionals who attended the EY Annual Alternative Fund Symposium in Cayman Islands last month.

Topics discussed in panels and presentations included tangible investing, AI, innovation and trends in alternative investing.

“Uncertainty, market conditions and changing investor preferences are creating new challenges for hedge fund managers,” said Jeff Short, Wealth & Asset Management Leader, EY Region of the Bahamas, Bermuda, British Virgin Islands and Cayman Islands.

“Those who demonstrate resilience amid the shifting landscape, while also offering products that can generate returns from short-term market dislocations, are well positioned to attract inflows.

“Our survey provides the industry with a better understanding of the trends that drive their business and highlights performance, differentiation and positioning, talent, product development, regulatory compliance and operations.”

Jessel Mendes, EY Bermuda partner and regional markets leader, who moderated the panel discussion on resilience in the shifting landscape at the symposium, added: “Consistent with the survey results, despite the challenging market, the vast majority of our asset management clients are performing well while balancing investor, regulatory and talent demands.”

He said: “Bermuda’s leading insurance-linked securities asset class continues to yield opportunities but we are also leveraging our global relationships, as appropriate, to attract hedge and private equity related engagements to the jurisdiction.

“The survey notes that international investors are bullish on the alternative fund industry and global managers are positioning their shops for long-term growth.

“As a result, we will continue to work with key stakeholders to capitalise on the asset management potential the island has to offer.”

The survey fielded responses from 226 managers and 61 investors between May and August 2022 and was conducted in collaboration with Coalition Greenwich.

Jessel Mendes, EY Bermuda Partner and Regional Markets Leader (Photograph supplied)

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Published January 06, 2023 at 7:57 am (Updated January 06, 2023 at 7:57 am)

Alternative fund managers deliver value in volatile financial markets

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