The appetite for alternatives

Jersey is an established jurisdiction as an international fund domiciliation hub, with the net asset value of regulated funds under administration totalling £361 billion (€400 billion).

Alternative funds – from private equity to infrastructure and real estate – now account for more than 80% of the bailiwick’s funds business, and this survey was undertaken to get a sense of the future direction for this asset class amid the numerous challenges that lay ahead. These include global economic volatility as a result of Covid-19, using ESG factors to bring down carbon emissions and responding to regulation.

With multiple factors and risks orbiting the investment landscape, what is the appetite for alternatives? Where do investors identify the greatest opportunities? And how critical are ESG factors to alternative investment strategies? Funds Europe, in association with Jersey Finance, surveyed the industry to provide answers to these core questions. Key takeaways include:

27% of respondents expect significant growth in the appetite for alternatives over the coming year.
43% expect significant growth in the appetite for alternatives in the next five years.
Nearly half (48%) believe private equity and infrastructure will offer the most exciting opportunities over the next five years.
In a world where reducing carbon emissions is vital to our future survival, 32% say ESG factors are “critical” to alternative investment strategies, while 20% say it’s either not relevant or important.
More than half (52%) expect the highest demand for alternatives to come from family offices.
The US (59%) and China (45%) are expected to drive the highest investment demand.
Regulatory standards (58%) is the highest-ranked factor in the decision-making process.
50% cited expertise as the number-one challenge for alternative fund domiciles in responding to greater regulation.

This is the first year that Funds Europe and Jersey Finance have delivered such a survey together with the aim of mapping out potential directions for the alternatives sector.

Continue reading the report: Shaping alternatives »