More asset managers are planning to launch new alternative investment products, including hedge funds and private equity funds, according to new research.
The study by State Street, showed that of the 250 global asset managers surveyed, 85% are planning to offer hedge funds in the next five years, a 15% rise from today.
In addition, 83% plan to offer real estate funds and private equity funds, up 13% and 24% respectively.
“As asset managers expand their product suite and the number of markets their products are distributed to, they are also becoming less dependent on intermediaries; with nearly half (44 percent) expecting to increase their volume of direct sales,” said David Suetens, head of State Street Luxembourg.
“The effect of regulatory reform and technology may thus change the nature of distribution of funds.”
As a result of asset manager consolidation and the growth of passive investing over active investing, traditional long-only managers have been launching hedging strategies that require a range of new fund services.
Particularly in Europe, some asset managers have expanded under the UCITS banner, enabling them to go short.
The State Street survey also showed the majority of asset managers plan to launch new cross-border products in the next five years, but 88% see distribution-related data as a challenge in achieving this.
“Clients are looking for a flexible, scalable information technology infrastructure that ensures a fast and accurate delivery and execution throughout the investment lifecycle,” added Suetens.