New sources of capital are set to shake up the fund financing market in the coming years, according to a report into the sector by Funds Europe.
The arrival of new entrants providing fund finance was highlighted by experts interviewed for the report. “You’ve got a whole bunch of new lenders, people like insurers and pension funds, realising that fund financing is a good way for them to deploy the capital they’ve got,” said Jen Yee Chan, specialist in fund finance at the law firm Simmons & Simmons.
The full report, ‘Trends in fund finance’, was compiled in association with RBS International featuring interviews with professionals in various jurisdictions.
The entry of new lenders comes amid rising demands for finance, creating what Stefan Szczurowksi, director of institutional banking at RBS International, called “a supply-demand gap”. At the same time, there is a growing appetite among institutions to access alternative investments. A survey by private asset research group Preqin found that the top 25 global institutional investors planned to increase their allocations to private markets from 9% to 15-20% by 2030.
The report also examines the growing role of sustainability in fund financing and the increasing complexity of financing structures.
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