Private markets dominate new manager search activity

Private market asset classes, which accounted for 48% of all searches among bfinance clients, dominated new manager search activity in Q3, according to the firm’s latest quarterly Manager Intelligence and Market Trends report.

However, this figure was much lower compared to 61% of all searches in the previous 12-month period as the third quarter was still weak and followed a sharp slowdown in overall industry fundraising during the first and the second quarter of the year.

At the same time, private debt remained the most sought-after asset class in private markets as it performed relatively well, benefitting from the higher yields, compared to real estate asset class which continued to struggle.

According to the report, the demand in the developed markets bounced back during that time, rising from 14% to 21% of all searches, while emerging markets (EM) manager appetite dipped by 12%.

Also, across the global developed markets, Q3 offered a ‘period of respite’ for active managers who were not focused on high growth companies.

Following this, the data from the latest quarter showed that investor confidence had gone up and they had become more bullish, renewing their interest in the broader markets. This was driven by a more positive second half of the year and hopes of continued success into 2024 and  was supported by June, July and August presenting the lowest bfinance Risk Aversion Index (RAI) in the 12 months.

Hedge funds also bounced back and accounted for 45% of all new diversifying strategies manager searches compared to 36% in the previous year.

According to the bfinance’s report, investors targeting diversifying strategies were a mix of those looking to add to their already existing exposures and those looking for improved returns.