BALA CYNWYD, Pa., Nov. 14, 2017 /PRNewswire/ -- A majority of institutional allocators and family offices are optimistic about the future of active management and alternative investments, according to a survey of attendees at Context Summits West 2017. More than two-thirds (67%) believe active management will come back into favor and 64% plan to increase their allocations to alternatives over the next year, with an additional 32% planning to maintain their allocations.
Ron Biscardi, co-founder and CEO of Context Capital Partners, commented: "We continue to see growing demand for alternative investments among a variety of institutional allocators, including family offices, foundations and endowments, pension funds and sovereign wealth funds. Today's investors have no shortage of potential headwinds to worry about, from continued geopolitical uncertainty to historically low levels of realized volatility to historically high levels of market correlation. Each of these challenges highlights the need for new and innovative investment strategies that provide portfolio diversification and will help investors navigate complex and unpredictable market conditions."
The survey of more than 100 institutional investors and family offices was conducted at Context Summits West 2017 hosted by Context Summits, the preeminent producer of investment summits for the alternative asset management industry. In total, hundreds of managers, family offices and allocators representing over $400 billion in combined assets attended the more than two-day conference, which connects qualified investors with private fund managers via one-on-one meetings.
The full survey results, along with an analysis of key findings, is available at: https://contextsummits.com/resources/allocator-trends/.
The results from Context Summits West demonstrates an uptick in optimism from previous Context Summits events, including Context Summits Miami 2017 in February, when more than half (51%) of investors surveyed said they were optimistic about the industry and 72% planned to increase their allocations to alternative fund managers in 2017.
"As the hedge fund industry's largest capital introduction conference company in the world, we've witnessed first-hand how the alternative investment industry has continued to be a growth engine for the global economy, with institutional allocators continuing to commit large amounts of capital to alternative fund managers with new and interesting strategies," added Mark Salameh, co-founder and CEO of Context Summits. "As the market approaches a decade-long bull streak, the demand for strategies that can offer a differentiated return stream is greater than ever. To meet that demand, we still see a need in the industry to further educate and add clarity to the allocation process."
Additional key survey findings include:
- Allocators Prefer Emerging Over Existing Managers: Two-thirds of investors (66%) said they prefer to allocate to emerging managers (defined as those with shorter than a 3-year track record and/or less than $300 million in AUM), with more than half of investors (59%) looking for a fund that either has yet to launch or has a 1-3 year track record.
- Emerging Managers Face Multiple Challenges: With competition for institutional capital greater than ever, allocators ranked the top challenges faced by emerging managers, including fund size (23%), track record (22%), operations (17%), performance (11%) and reporting/compliance (10%).
- Allocators Keep Turning Over Their Portfolios: An overwhelming 91% of allocators plan to turn over some percentage of their alternatives portfolio over the next 12 months, with churn rates of 6-10% (24%), 11-15% (22%) and 16-25% (22%) voted as the most common. Nearly half (42%) of these allocators said the primary reason for the turnover was to further diversify their portfolio.
- Rise of Quants Seen as a Long-Term Trend: A strong majority (79%) of allocators view the rise of more machine-learning and quantitative strategies as part of a long-term trend, versus the 21% that view it as a bubble.
- Wide Range of Concerns for Alternative Investment Industry: Institutional allocators singled out crowded positions (24%), geo-political concerns (23%) and underperformance (20%) as the three biggest challenges or headwinds facing the alternative investment industry in 2017. In contrast fees (6%), regulations (11%) and low volatility (16%) ranked at the bottom of the list of concerns.
Context Summits hosts five events each year. The next event is Context Summits Miami 2018, which will be held January 31-February 2 at the Fontainebleau Miami Beach hotel in Miami, Florida. For additional information, please visit http://contextsummits.com/miami/ or http://www.contextsummits.com/.
About Context Summits
As the preeminent producer of events for the alternative asset management industry, Context Summits focuses on elevating the conference experience through an innovative format and structure where relationship building leads to unmatched results. A pioneer of the one-on-one 'summit' format, Context Summits utilizes an innovative approach to deliver effective and transparent networking events that elevate the conference experience for managers, allocators and investors. Through its systematic approach, Context Summits is able to attract high quality attendees, making meetings efficient and productive. For more details, please visit: http://www.contextsummits.com.
About Context Capital Partners
Context Capital Partners, LP is a leading alternative investment specialist firm headquartered in Bala Cynwyd, PA. Through direct and indirect partnerships, Context provides seed capital, marketing, distribution, operations and infrastructure support to top-tier alternative asset managers. Context's focus is delivering superior investment solutions to institutional investors and family offices by launching and expanding low correlation investment products that deliver clear edge.
Since inception, Context has led seed deals totaling more than $400 million in aggregate. The firm's subsidiary businesses include Context Asset Management, Context Summits, Context BH Capital Management, Context Liberty Bell, and Context Business Lending. For more information about Context Capital Partners, please visit www.contextcp.com.
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SOURCE Context Capital Partners