The asset management industry is undergoing a significant transformation as traditional asset classes continue to blur.
A research initiative has been launched to investigate the trend of fund hybridisation, capturing a snapshot of how European market participants are approaching this opportunity through survey-based data collection and interviews.
Investigating the Hybrid Frontier
The survey extracts insights into how the industry views funds that invest across both publicly listed and private market assets, providing a clearer understanding of this emerging trend.
Julien Aidan, product engineer on private market funds, notes that private markets are reshaping investment strategies due to higher rates, geopolitical uncertainty, and increasing pressure on performance.
As a pioneer in unlisted markets, SGSS is pleased to partner with Funds Europe in exploring how asset managers adapt their models to capture new opportunities.
The research addresses multiple critical pillars of hybridisation, including strategic relevance and motivation, operational execution, value creation and risk, and market adoption and distribution, which are essential for understanding this complex trend.
- Strategic relevance and motivation: The research aims to understand why organisations are adopting hybrid models, exploring whether the primary drivers are client demand, portfolio diversification, or a strategic response to current market volatility.
- Operational execution: It probes into the most critical operational challenges that organisations face, which may include liquidity management, valuation of private assets, and the robustness of existing technological systems.
- Value creation and risk: The study seeks to understand the perceived levers of value, such as liquidity pooling and risk-return optimisation, and investigates risks that may be underestimated by the market, including regulatory compliance and potential customer misunderstanding.
- Market adoption and distribution: The research maps out which customer segments are most suited for these products, helping to identify potential areas of growth, and identifies the obstacles preventing wider distribution.
Capturing Market Sentiment
Beyond strategy, the research examines the practicalities of fund design, including the ideal frequency for subscriptions and redemptions, as well as assessing whether the industry believes the operational complexity of these funds is adequately remunerated.
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Amandine Bozier, product engineer on private market funds, adds that investors are seeking the best of both worlds, and hybridisation of funds mixing listed and unlisted assets is gaining ground.
It is time to discover market players’ insights, as they seek more flexible vehicles to balance risk and return in a rapidly changing market.
The appetite for these solutions is clear, with many investors looking for ways to diversify their portfolios.
In this context, the optimal domiciliation hubs, such as Luxembourg and Ireland, are being considered for hybrid funds, and the research is assessing the industry’s views on the ideal frequency for subscriptions and redemptions.
If you would like to take part in the survey, please click here, and the results will be published after the summer, providing valuable insights into the hybrid fund market.
As the industry continues to evolve, it is essential to understand the complexities of hybridisation and how asset managers are adapting their models to capture new opportunities.
The findings of the research will be key in helping market participants handle the changing setting of asset management and make informed decisions about their investment strategies.
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