Cerulli: Wealth Allocations to Alts Could Reach $4T within Five Years<\/a><\/p>\nStanger also reported that redemption demand reached a new high, with repurchase requests equal to 12.4% of NAV in the quarter, the highest level it has measured. Sponsors met 38% of those requests, returning $5.9 billion to investors in the quarter. For the first half of the year overall, sponsors have returned $12.7 billion to investors. So far in the third quarter, three NAV BDCs reported repurchase requests equal to 4.6% of NAV versus 7.9% for the second quarter. Management teams also pointed out that two-thirds of second-quarter redemptions were from the first-quarter queue, which is now diminishing, while new requests are subsiding.<\/p>\n
\u201cWe think we’ve troughed by way of inflows, and we commented on that,\u201d Blue Owl Co-CEO Marc Lipschultz said during his firm\u2019s earnings call. \u201cRedemptions are down in our non-traded BDCs, and \u2026 we haven’t seen increases in redemptions across our other wealth-dedicated products over the past few quarters. So we’re cautiously optimistic that non-traded BDC redemptions will keep coming down, and it appears others are seeing that too.\u201d<\/p>\n
Several management teams noted that requests have largely come from investors based in Asia, whereas redemption requests from U.S.-based investors have been more muted. In addition, executives underscored that the structures are working as intended, with monthly and quarterly redemption limits serving their role in protecting investors.<\/p>\n
Management teams also leaned into discussing the performance of their funds as a counterweight to the redemptions issue and a key to winning advisors\u2019 trust, with many citing double-digit annualized net returns on their products.<\/p>\n
\u201cWe continue to see significant net inflows into our platform today,\u201d Brookfield CEO Connor Teskey said during his firm\u2019s call. \u201cObviously, there\u2019s some relative softness in kind of the non-traded BDC space, but even there, Oaktree\u2019s product clearly has significantly outperformed the market. Any softness there is being more than offset by significant inflows we\u2019re seeing in other of our private wealth products, in particular infrastructure, which continues to go from strength to strength. In terms of how we build that product suite out, we\u2019re going to continue to be very methodical and disciplined in how we build out our private markets business.\u201d<\/p>\n
Another common theme for asset managers is building out broader product listings across sectors and strategies to create a diversified menu for the wealth channel. In addition, talk continued to pick up on multi-asset and multi-manager funds. There was also discussion about exploring more joint ventures between asset managers. In the medium term, managers highlighted the defined contribution market, implementing daily pricing for some funds, tokenization and secondary market-making to provide liquidity options.<\/p>\n
In addition, product development was a common theme. Blue Owl, for example, said it is planning several new wealth products over the next 18 months in alternative credit, real estate and infrastructure. Stepstone said it is looking across private equity, credit, infrastructure, venture and secondaries. Hamilton Lane discussed building a suite of products alongside its international funds, as well as launching new vintages of special situations real estate secondaries and multi-strategy growth equity funds. And Blackstone is rolling out a new evergreen multi-strategy hedge fund (BXHF).<\/p>\n
There was also some conversation about how crowded the market is becoming, including smaller asset managers sometimes with a single fund for the wealth channel, attempting to ride the coattails and, in some cases, bringing in funds that are redundant with what already exists in the market. Management teams felt that, ultimately, the herd would thin, with clear winners emerging and potentially some players consolidating.<\/p>\n
To retain market share, many of the asset managers talked about how their distribution strategies, which include getting products listed on alts platforms or whitelisted by financial advisory firms. They\u2019ve also invested heavily in building out in-house sales teams aimed specifically at the wealth channel.<\/p>\n
During its call, Apollo provided an update on its goal of providing daily NAVs for some of its products, which began on July 1 for its fixed-income funds. It aims for Oct. 1 for all its credit assets. The effort, in part, is to help transparency with private wealth investors and to make its funds more acceptable to 401(k) plans. It also discussed investing in secondary market-making infrastructure to expand liquidity options for evergreen funds.<\/p>\n
\u201cThe changes we\u2019ve made in estimated daily value, our ICE (Intercontinental Exchange) joint venture<\/a>, our focus on settlement mechanics and on market making are all efforts to bring us closer to these [investors],\u201d Apollo CEO Marc Rowan said during the firm\u2019s earnings call. \u201cIt’s not to say the rest of the industry is ignoring this. It\u2019s just no one is as fully committed to what we see as this big trend that is taking place in our industry and will increasingly shape our future.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Alternative asset managers wrapped up second-quarter earnings in recent weeks, with most reporting continued success in raising capital…\n","protected":false},"author":2,"featured_media":736104,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[84,4176,4174,4175,56,54,55],"class_list":["post-736103","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-finance","tag-personal-finance","tag-personalfinance","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/736103","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=736103"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/736103\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/736104"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=736103"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=736103"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=736103"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}