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By: Dr. Sofia Harrschar & Max Gutsche, Universal Investment

The global opportunity for alternative managers is extremely compelling. In a recent study, PwC projects that alternative investments are likely to remain the fastest growing category of asset management in the next five years and expected to grow by a third to nearly $24 trillion by the end 2027, a significant uptick from the $18trn held at the end 2022. With private markets set to comprise the largest share of global asset management revenues by 2027, alternatives hold undeniable opportunity.

Despite what seems to be a golden opportunity, US alternative asset managers are facing a challenge raising funds in the domestic market. Heightened competition from a vast array of players, combined with market dynamics seeing strong returns from government bonds, are presenting barriers even for high-performing managers.

Some asset managers have started to diversify their investor base and tap into less saturated markets. In the case of Europe - a $30 trillion market ripe with investors who are increasingly evaluating international managers based on performance rather than geography - managers may see the promise of growth that the US once held.

Accelerating potential diversification outside the US market includes impending updates to the European Long-Term Investment Funds (ELTIF) Regulation which will help non-institutional investors access alternative funds, which entered into force in January 2024. US ......................

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