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Laxman Pai, Opalesque Asia: According to Moody's first-quarter report on U.S. alternative asset managers, total fundraising for Q1 2020 rose to $67.3 billion, a 22% increase from the same time a year ago, and 5% from Q4 2020.
Meanwhile, total AUMwas up 36% year-over-year and 11% compared to Q4. Investors' need for higher returns, which are not available in many traditional asset classes because of the still historically low level of interest rates, should drive further growth in private market strategies.
Investors' need for higher returns, which are not available in many traditional asset classes because of the still historically low level of interest rates, should drive further growth in private market strategies, the report pointed out.
"Strong financial markets and an improving global growth outlook as the world emerges from the pandemic support higher realized performance fees and higher accrued performance fees, which suggests higher realizations could continue," Moody's said.
Of course, there are also risks, notably the accelerating pace of inflation, which, if sustained, could make future growth and profitability more difficult for alternative asset managers, particularly in the credit business, it added.
Fee-related earnings (FRE), the core component of distributable earnings (DE), grew 30% year-over-year for the surveyed group, principally driven by AUM growth but also from an increase in advisory fees. Investors valueFRE (mainly manageme...................... To view our full article Click here
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