Despite being a growing reservoir of funds under management, this critically important pool of capital is confronting mounting problems collating and disseminating key data in a timely manner.
The ratings house is pinning its growth strategy on a revamped methodology that increases the emphasis on governance to 25 per cent – a timely move considering APRA’s proposed reforms.
More retail alternative funds to hit the market
(Pictured: Joseph Sheeran)
Retail investors are expected to drive an increase in alternative fund assets under management over the next six to seven years, according to Joseph Sheeran, PricewaterhouseCoopers assurance partner.
Global alternative fund assets are forecast to rise faster than almost any other asset class, according to PricewaterhouseCooper’s Asset Management 2020: A Brave New World report, and much of that growth is expected to come from an increased demand for the product from retail investors.
The PwC report, released earlier this year, forecast global assets under management to rise from $US64 trillion in 2012 to over $US101 trillion by 2020. Alternative assets will rise from $US6.4 trillion to $US13 trillion, or at a rate of around 9 per cent per annum.
“There will be greater access to retail investors … probably the greater growth will come through high net worth individuals but also sovereign wealth funds,” Sheeran said at a Hedge Funds Association regulatory update last week.
In the retail investment space in Australia, Montgomery Investment Management is understood to be looking at launching a hedge fund in Australia if it can secure the right people to manage it.
In 2020 alternative asset managers are also likely to have a bigger voice in government, according to PwC.
“I think asset management will have a real seat at government, even more so than it does today, and I think alternatives will be a bigger part of that,” Sheeran said.
