- Advertisement -
- Advertisement -

Related

Hedge Fund Assets Expected to Rise by a Third by 2023

Latest Report

- Advertisement -

Stockholm (HedgeNordic) – The alternative assets industry, which includes hedge funds, private equity, real estate and infrastructure investments in a variety of vehicles, is predicted to reach $14 trillion in assets under management by 2023 from $8.8 trillion recorded at the end of last year. Data provider Preqin also predicts private equity funds will overtake hedge funds as the largest alternative asset class even though the hedge fund industry is anticipated to grow by 31 percent in five years.

In a report called “The Future of Alternatives: The Classes of 2023,” Preqin predicts that the hedge fund industry will oversee $4.7 trillion in assets under management in five years from $3.6 trillion as of the end of last year. The capital managed by private equity funds, meanwhile, is projected to grow 58 percent from $3.1 trillion to $4.9 trillion, allowing the group to become the largest alternative asset class. Private equity funds and hedge fund vehicles collectively accounted for three-fourths of the $8.8 trillion alternative assets industry at the end of last year.

“While industry participants are predicting this share to decrease over the next five years to 69 percent, as other alternative asset classes look set for faster growth, these industries are expected to contribute the majority (56 percent, $2.9tn) of the growth in dollar terms over the next five years,” the report writes.

Source: Preqin.

Private debt and infrastructure are predicted to double their assets under management, reaching $1.4 trillion and $1.0 trillion, respectively. Real estate funds, meanwhile, are expected to grow 50 percent to $1.2 trillion. Natural resources funds are expected to reach the highest rate of growth (300 percent), yet, will remain the smallest asset class among alternatives with $800 billion in assets. Preqin’s estimates are based on average predictions from 420 fund managers and investors polled on each asset class.

“Fourteen trillion dollars may sound like an overly ambitious prediction for the alternative assets industry, but it is lower than the average growth rate we’ve seen in the past decade. There are several key factors that will drive this growth, including: the proven long-term performance of alternatives; the growing opportunities available in private debt; and the rise of emerging markets in which alternatives funds are already entrenched. If anything, we believe that $14tn is more likely to be too low than it is to be too high,” says Mark O’Hare, Preqin’s chief executive officer.

 

Picture © Gajus—shutterstock.com

Subscribe to HedgeBrev, HedgeNordic’s weekly newsletter, and never miss the latest news!

Our newsletter is sent once a week, every Friday.

Eugeniu Guzun
Eugeniu Guzun
Eugeniu Guzun serves as a data analyst responsible for maintaining and gatekeeping the Nordic Hedge Index, and as a journalist covering the Nordic hedge fund industry for HedgeNordic. Eugeniu completed his Master’s degree at the Stockholm School of Economics in 2018. Write to Eugeniu Guzun at eugene@hedgenordic.com

Latest Articles

Zetterquist Leads Antiloop’s Reset as Cygnus and Atlas Gain Momentum

After helping build and later steer the operations of fund boutique Norron, first as COO and then as CEO, Alexander Zetterquist is embarking on...

From Running Laps to Running Capital: Ex-Taiga Analyst at DNB

After nine years as an analyst at equity long/short hedge fund Taiga Fund, Øystein Kvaerner has joined DNB Asset Management to launch a new...

Nordic Hedge Funds Wrap Up Strong Third Quarter

Nordic hedge funds continued their strong run of performance since May, advancing an additional 1.7 percent on average in September – the industry’s second-best...

DNB’s Stable Alpha Goes DACH

DNB Asset Management has managed its in-house multi-manager, multi-strategy fund platform since early 2020. After a period of muted performance in its early years,...

Opportunities Lie Beneath Aggregate Credit Spreads

Credit spreads across the United States and Europe have tightened to historically low levels, leaving limited reward for simply holding long credit positions. This...

European Alternative Investments Conference 2025

More than 200 practitioners, academics and thought leaders met in Copenhagen for the second European Alternative Investments Conference, hosted by Finansforeningen, CFA Society Denmark...

Allocator Interviews

In-Depth: High Yield

Voices

Request for Proposal

- Advertisement -
HedgeNordic
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.