NEW YORK, May 9, 2016 /PRNewswire/ -- Private equity,
real estate and infrastructure managers anticipate strong growth in
assets in the next five years, according to new research from BNY
Mellon, a global leader in investment management and
investment services.
The report, Building for the future: How alternative
investment managers are rising to the demographic challenge,
was prepared in collaboration with Preqin, the alternative asset
industry's leading source of data and intelligence. It surveyed 340
private equity, real estate and infrastructure fund managers
globally.
Global macro-economic, social and environmental shifts are
fuelling a need for investments in real assets, property and
infrastructure worldwide. The report forecasts that appetite for
these assets among retail and institutional investors will continue
to grow. Sixty percent of infrastructure managers, 44% of real
estate managers and 39% of private equity managers surveyed expect
their assets under management to grow by at least 50% in the next
five years.
"Deep-rooted demographic and macro forces are driving an
unprecedented need for investment in real assets such as transport
facilities, communications networks, housing and hospitals. These
demands far outstrip the reach of government and public finances,
and this creates huge opportunities for private capital to play a
part in people's everyday lives," said Alan
Flanagan, global head of Private Equity and Real Estate Fund
Services at BNY Mellon.
While institutional investors, most notably pension funds and
family offices, currently demonstrate the biggest appetite for real
investments, almost half of the private equity and real estate fund
managers surveyed believe that retail investors will account for a
higher level of capital inflows by 2020 than they do today.
Investment will come from mass affluent and high net worth
individuals in developing markets, the continued expansion of
sovereign wealth funds, and increasing numbers of defined
contribution schemes.
"Investors are turning more and more to real assets to find
yield, diversify their portfolios, and steer through volatile
markets," said Flanagan. "The growth in real asset investments has
been impressive and there is no sign of it slowing down. As a
result, the marketplace has become increasingly competitive on deal
sourcing, presenting challenges for managers to successfully deploy
the capital they have raised."
The majority of alternative investment managers surveyed have
seen institutional investor appetite for real assets climb over the
last 12 months. A third of real estate and 41% of infrastructure
managers are seeing the most demand coming from public pension
funds, followed by private sector pension funds. Private equity
managers see the greatest interest coming from family offices,
followed by public pension funds (26% and 25% respectively). The
survey also revealed that more than a third of infrastructure and
real estate fund managers had altered their investment approach,
either by diversifying their assets or exploring different
geographies and niche strategies.
The need for transparency, driven by clients and regulators, is
prompting a growing number of managers to consider outsourcing
certain functions. Overall, two-thirds of fund managers across all
asset classes feel regulation might lead to outsourcing in the
future. Cost was the most commonly stated reason to outsource, in
addition to having access to enriched data and analytics from an
outsourcing provider and access to the expertise of external
staff.
"Investment managers' business models must have flexibility to
thrive in such a fast-evolving environment and also be able to meet
growing regulatory reporting as well as institutional investor
demands for transparency," added Flanagan. "To maintain strong
allocations and achieve sustainable growth, it's vital that
managers of assets are invested in their infrastructure and
supported by the right operating models."
BNY Mellon Alternative Investment Services
BNY Mellon
is a leading administrator of alternative assets – including single
manager hedge funds, funds of hedge funds, and private equity –
with more than $750 billion of
alternative assets under administration and/or custody and offices
worldwide. BNY Mellon also offers a wide range of cash management,
foreign exchange, collateral management, corporate trust, and
wealth management services to the alternative investments
industry.
BNY Mellon
BNY Mellon is a global investments company
dedicated to helping its clients manage and service their financial
assets throughout the investment lifecycle. Whether providing
financial services for institutions, corporations or individual
investors, BNY Mellon delivers informed investment management and
investment services in 35 countries and more than 100 markets. As
of March 31, 2016, BNY Mellon had
$29.1 trillion in assets under
custody and/or administration, and $1.6
trillion in assets under management. BNY Mellon can act as a
single point of contact for clients looking to create, trade, hold,
manage, service, distribute or restructure investments. BNY Mellon
is the corporate brand of The Bank of New York Mellon Corporation
(NYSE: BK). Learn more at www.bnymellon.com. Follow us on Twitter
@BNYMellon or visit our newsroom at www.bnymellon.com/newsroom for
the latest company news.
Contact:
Joseph F.
Ailinger Jr.
+1 617-722-7571
joe.ailinger@bnymellon.com
Sally Moore/Anthony Cornwell
+44 20
3761
4442
bnymellon@fourbroadgate.com
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SOURCE BNY Mellon