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Bailey McCann, Opalesque New York: New survey results from SEI & Preqin show a persistent disconnect between investment managers and investors. Preqin puts the total alternatives market at approximately $7.7 trillion across strategies and investors in the survey indicate that they have plans to continue to allocate to alternatives. However, investors also expect more transparency, as well as a vast operational and technological infrastructure - all with lower fees.
"The disconnect between what LPs expect and what it means for the GP continues to be significant," says Jim Cass, Senior Vice President and Managing Director, at SEI Investment Manager Services in an interview with Opalesque. "For firms that aren't running mega-funds, there is a significant cost to do business and that puts pressure on GPs and what they can do."
According to Cass, as investors have moved into alternatives they have also set the bar higher for the managers they select - in some cases trading away outperformance for the consistency of mega-funds. As a result, mid and small-tier GPs have moved to offer more fund structures and separately managed accounts that let LPs pick and choose best ideas. While that works for bringing in new business, it also sets up an increasingly complex account management structure for GPs and can make it difficult for LPs to compare peer managers across vehicles. The multi-structure approach also removes resources from investing in order to meet growing repor...................... To view our full article Click here
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