Alternative funds expect surge in pension inflows

A new study conducted by Ocorian, a global leader in entity administration and alternative fund services, reveals that alternative fund managers are anticipating a significant increase in inflows from pension funds over the next 18 months.

The research, which surveyed 100 alternative fund managers across the United Kingdom, United States and Europe, indicates that 36% of respondents expect a dramatic rise in investments from pension funds, while an overwhelming 87% predict an overall increase in inflows into alternative investments from this sector.

The findings highlight the growing interest of pension funds in allocating funds to alternative investment strategies. These funds, traditionally associated with more conservative investment approaches, are now recognising the potential benefits of diversification, enhanced returns, and lower volatility that alternatives can offer.

Moreover, the study reveals that alternative fund managers also anticipate increased inflows from other sectors.

Approximately 72% of respondents expect inflows from private banks to rise, with 33% foreseeing a significant increase. Meanwhile, 61% of alternative fund managers predict increased investments from corporates, with 34% anticipating a dramatic rise.

The table provided in the study illustrates the expected changes in inflows into alternative investments over the next 18 months across various sectors, including pension funds, sovereign wealth funds, insurance companies, fund of funds, family offices, high-net-worth individuals, corporates, retail investors, private banks, and insurers.

According to the research, alternative asset managers are not only expecting increased inflows but are also optimistic about the availability of attractive investment opportunities in the coming years. An impressive 93% of respondents believe that these opportunities will expand, with 17% predicting a dramatic increase. Only 5% anticipate stagnant levels, while a mere 2% foresee a slight decline.

Paul Spendiff, head of business development: global funds at Ocorian, commented on the findings, saying, “Our research shows that alternative asset managers are feeling very optimistic about the next 18 months, with increasing levels of inflows across all sectors and in particular from pension funds, private banks, and corporates who want to reap the benefits that alternatives can bring.”

As alternative investments gain traction among institutional investors, the surge in inflows comes with increased demands for transparency, customised reporting, and detailed asset-level information. Alternative asset managers are turning to firms such as Ocorian to support their investor reporting and meet these evolving requirements.

Ocorian, with its extensive experience in alternative fund services and the management of over 15 000 structures for more than 6 000 clients globally, is well-positioned to assist asset managers in meeting these demands.

The study conducted by Ocorian in partnership with independent research company PureProfile included alternative fund managers specialising in real estate, private debt, private equity, and infrastructure. The research was carried out in April 2023 and surveyed fund managers from the UK, US, France, Germany, Netherlands, Sweden, Switzerland, Finland, and Norway.

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