By: Lee Burchell
Since the 2008 financial crisis, large institutions (e.g. pension schemes, sovereign wealth funds, endowments, and insurance companies) have been looking for reliable cash revenues and risk diversification beyond traditional funds. As a result, there has been an upswing in investment in alternative asset classes.
Inflows into alternatives continue to grow consistently: PricewaterhouseCoopers (PwC) estimates allocations will increase at a rate of 9.3% per year, resulting in Assets under Management (AuM) reaching $13 trillion (globally) by 2020.
In addition, global growth in high net worth individuals (HNWI) presents a significant opportunity. A Capgemini study found North American HNWI wealth stands at $16.6 trillion, Asia-Pacific at $17.4 trillion and European at $13.6 trillion.
How does this affect private client wealth managers and family offices? Research shows that today’s managers face increased pressure from their clients to deliver better performance. In its “Strategy and Global Wealth Management Survey 2016”, PwC found that only one third of clients were very satisfied with their wealth manager’s service.
In order to remain competitive, wealth managers must diversify into private equity, Lombard loans, real estate, infrastructure investments, hedge funds, and derivatives.
What’s the best and most successful way to do this?
Developing the wealth operating model to support alternative investments
In its latest whitepaper, “Private client wealth managers and family offices: Investing in alternative assets to increase returns”, SS&C GlobeOp looks into the opportunities presented by alternative asset classes, and their uptake by private client wealth managers.
The paper discusses the current investment landscape, what clients are looking for, and what wealth managers must consider before embarking upon diversification, including potential pitfalls and a strategy for success.
SS&C is a global leader in the provision of technology platforms and outsourced services for wealth managers who invest private client money in both alternatives and traditional asset classes. For more information contact firstname.lastname@example.org.