Fund managers are prioritising diversification, digital transformation, and talent acquisition in 2025, with the UK remaining the top domicile for alternative funds amid economic uncertainty, according to a report.
The Core Alternative Managers’ Mood Index (Cammi) survey has highlighted an industry focus on operational efficiency and technological integration, with 28.8% of fund managers citing talent acquisition as a key priority and 27.2% emphasising digital transformation.
Diversification emerged as a key risk management strategy in the survey, with 26.9% of respondents prioritising it to mitigate volatility and seize growth opportunities. Political uncertainty (28.8%) remains the most significant growth barrier, followed by fundraising challenges (19.2%) and evolving global regulations (18.4%).
Conducted by Gen II Fund Services LLC, a private capital fund administrator, the study surveyed over 120 UK and European asset management firms. It found that nearly half (46%) of fund managers are outsourcing operations to enhance efficiency and reduce costs.
“Fund managers are very focused on talent and technology at the moment,” said Alex Di Santo, head of private equity, Europe. “As digital transformation accelerates, integrating new technologies into fund operations will be crucial for managers aiming to increase operational efficiency and competitive positioning.”
Investors focus on diversification in face of geopolitical and environmental risks
Despite macroeconomic uncertainty, the UK remains the most attractive domicile for alternative funds at 26.1%, followed by Luxembourg (16.6%) and Singapore (15.4%), according to the survey. “The UK’s continued appeal as a top domicile for European fund managers demonstrates its resilience and adaptability,” noted Michael Johnson, chief commercial officer, Europe.
Investor priorities in 2025 are shifting, according to the survey, with cash management (28.4%) and cybersecurity (27.0%) topping due diligence discussions. ESG factors (20.7%) remain influential, though the focus on security and financial stability has intensified. “Cybersecurity is now a key discussion point with investors, reflecting the increasing digital landscape and surge in artificial intelligence deployment,” said Di Santo.
Operational efficiency is driving widespread outsourcing (46%) and co-sourcing (29.8%) among fund managers, with technology adoption set to increase to 11.6% by the end of 2025. According to the researchers, this indicates a broader industry shift toward scalable and flexible solutions.
“As we enter a continued period of transformation, fund managers are adapting operating models, resourcing strategies, and technology roadmaps to keep pace operationally whilst at the same time reducing cost,” added Di Santo.
