Private Markets Have 'Unique Opportunity' To Challenge Traditional Markets

• Published date: 21 December 2022
• Subject Matter: Finance and Banking, Financial Services, Fund Management/ REITs
• Law Firm: Ocorian
• Author: Mr Richard Hansford

Private markets have a 'unique opportunity' to accelerate capital deployment from traditional markets to alternative assets as global economic conditions worsen, Ocorian, the global diversified financial services group, predicts.

Growth in the year ahead will focus on pure private market investments, and a shift towards multi alternative asset strategies. Ocorian also forecasts an increased focus on distressed asset funds which will be longer term and closed ended.

Alternative assets are growing in popularity as they offer the potential for attractive yields and low correlation to economic conditions such as interest rates and inflation, unlike bonds and equities.

However, the sector needs to speed up on standardisation and tokenisation to match traditional markets. Ocorian estimates the sector has up to 18 months to achieve what traditional markets have done in 12 years in this area.

Ocorian is seeing growth in private markets reflected in planned fund launches - its analysis* shows more than 1,170 private funds are raising capital across the major jurisdictions. Around 600 are based in Luxembourg compared with 226 in Ireland, 193 in the UK, 83 in Guernsey and 71 in Jersey.

That represents huge growth this year which has seen around 226 new funds domiciled across the same jurisdictions with 121 in Luxembourg, 44 in Ireland, 37 in the UK, 14 in Guernsey and 10 in Jersey*.

Richard Hansford, Head of Business Development - UK at Ocorian said: "The whole investment thesis and the investment life cycle is changing. Investors are willing to commit capital for longer and see greater value in private assets, which is driving growth. Investors increasingly believe it will be some time before we see growth in traditional markets.

"Luxembourg is clearly the biggest in terms of private asset market activity, and that trend will continue, demonstrating the preference for managers to have onshore EU structures in the private market space, which applies very much to US managers wanting to expand in the European Union.

"At Ocorian we have major growth ambitions and...