Investors steady on alternatives allocations, says Seward & Kissel report
Just 4% of allocators to alternative investments said they would decrease their allotments in 2021, while 42% said they anticipate an increase, according to a survey from US law firm Seward & Kissel.
The firm analysed the views of representatives from pension funds, endowments, family offices and seeders among others, to compile the results of its 2021 Alternative Investment Allocator Survey.
Asked how their organizations’ allocations across a wide range of alternative investments would change in 2021, 42% of participants anticipated an increase to at least one strategy and 54% said they would maintain their allocations, while just 4% said their allocations would decrease.
The strategies for which participants expect to increase allocations to in 2021 were primarily less liquid strategies, with private equity, private credit, and venture capital accounting for the top three.
At least 50% of each investor type surveyed also indicated that their organizations currently allocate to emerging managers (those founded less than two years ago). Fund-of-funds and seeders were most open to emerging managers, at 100%, and pensions sat at the low end, at 50%. In another strong sign of industry confidence, nearly 50% of survey participants expected their average allocation size to exceed $25m in 2021.
Asked to identify their organizations’ most important consideration in making allocations, respondents cited investment strategy/process most frequently (86%), followed by manager’s track record (55%), and pedigree (53%). About three-quarters of respondents cited favorable fees as the most sought-after term when negotiating side letters, well more than any other request, said Seward & Kissel.
Steve Nadel, lead survey author and Seward & Kissel Investment Management Group partner, said: “The expressed interest in emerging managers appears to signal that the world has changed significantly since the pandemic, in terms of alternative investment marketing.
“It is now much easier for newer managers to somewhat level the playing field by getting their message out through Zoom and other video conferencing tools. And, more importantly, many allocators appear to be getting comfortable with this form of communication.”
SteelEye plots move into North America
Compliance technology and data analytics firm SteelEye has raised more than £17m in funding as it eyes expansion plans into North America.
The UK-based firm said a growing demand for cloud-based compliance and regulatory oversight technology, coupled with the compliance requirements with employees working from home which have been highlighted through the Covid-19 pandemic, encouraged the drive to explore the US markets.
SteelEye offers a SaaS-based regtech platform that allows banks, brokers, and asset managers to simplify their compliance processes across various EU, UK and now U.S., market regulations.
The business raised more than $17m through two funding rounds in 2020. The first was led by Fidelity International Strategic Ventures (FISV) alongside existing investor Illuminate Financial. The second and more recent round was completed in December with U.S.-based investor Beacon Equity Partners leading the round. Ed Mullen, founder of Beacon, is joining the SteelEye Board of Directors.
CEO of SteelEye, Matt Smith, said: “The U.S. and Canadian markets are crying out for a new way to oversee their conduct and trading activity. Our technology is a huge opportunity for firms needing to reduce the complexity and cost of compliance, which in some cases represents as much as 10% of a firm’s noninterest expenses.”
SBAI unveils emerging manager guidance
The Standards Bord for Alternative Investments (SBAI) has launched a new programme for small and emerging fund managers.
The programme, SPARK, features alternative investment industry leaders, in candid conversations, providing insight and tools to help small managers get ahead. The programme includes dedicated events with institutional investors discussing expectations and providing key takeaways for small and emerging managers to be successful in meeting the expectations of institutional investors.
Mario Therrien, chairman of the SBAI and head of investment funds and external management at CDPQ, said: “I am very excited about SPARK which will provide unique resources for small and emerging asset managers to generate operational alpha.
“Access to industry leaders responsible for accelerating and launching generations of “next generation” asset managers through the SBAI community is unparalleled. The programme embraces the mission of the SBAI which is to collectively improve investor outcomes and help managers thrive.”
Winton’s former co-COO has been appointed a managing director at crypto trading specialist GSR Capital.
Hong Kong-based GSR said that Andrew Moss, who was co-COO at Winton from 2017-19, would be responsible for leading the firm’s new business unit, which will develop investment vehicles for institutional investors.
Moss’s appointment comes as GSR revealed it had eclipsed $1bn in notional options volumes in 2020, and aims to reach a headcount of 140 by July, up from 40 people 12 months earlier.
Moss spent 14 years at Winton, helping to build the boutique hedge fund into one of the most respected and largest investment firms in Europe. Prior to serving as co-COO he was the CEO of Winton Investment Management and the Global Head of Investment Solutions.
Tiger Asset Management has recruited the former CEO of Royal Mail Group as chairman of the board.
Rico Black, who led the Royal Mail Group since 2018, joins with immediate effect and will develop a key focus on the firm’s investment advisory growth.
Black brings over 30 years’ experience as a businessman and entrepreneur, and is a leading figure in the global parcel industry. Prior to his appointment as CEO of Royal Mail, he was CEO of Royal Mail Parcels, responsible for the group’s international activities, including letters, as well as the national parcel business. He also served as CEO of GLS for 18 years. In 1989, he had co-founded German Parcel, a national parcel service provider in Germany, later rebranded as GLS.
Matthias Rutsch, Founder & Investment Advisor at Tiger Asset Management, said: “We are delighted to welcome Rico to Tiger Asset Management. I am sure his support and extensive network across the European business community will prove invaluable as we embark on the next stage of our growth.”