“The biggest challenges facing alternative fund managers when it comes to fund raising is actually the regulatory environment”, says Paul Spendiff, head of business development at Ocorian. Photos:  Ocorian, Johny Goerend / Unsplash. Montage: Maison Moderne

“The biggest challenges facing alternative fund managers when it comes to fund raising is actually the regulatory environment”, says Paul Spendiff, head of business development at Ocorian. Photos:  Ocorian, Johny Goerend / Unsplash. Montage: Maison Moderne

Current regulations are the biggest challenge for funds trying to raise capital in the alternative asset class, a new study by Ocorian shows.

The report also highlights reporting, liquidity and the availability of assets as notable challenges in the field.

The corporate and fund services provider Ocorian worked with the independent research company PureProfile, who interviewed 100 alternative fund managers in sectors including real estate, private debt, private equity and infrastructure. The managers were from various regions such as the UK, US, France, Germany, Netherlands, Sweden, Switzerland, Finland and Norway. The interviews were conducted in April 2023.

Paul Spendiff, head of business development at Ocorian, said in press release: “Despite the ongoing tumultuous economic conditions and market volatility, our research shows that the biggest challenges facing alternative fund managers when it comes to fund raising is actually the regulatory environment and issues around reporting.”

In the list of barriers affecting successful capital-raising efforts, the study indicates that reporting issues come second.

According to Ocorian, these challenges are surfacing when “the industry faces global regulatory burdens and impending regulatory changes, as well as increased scrutiny from regulators over sustainability practices and reporting.”

The study points out that the third and fourth most significant hurdles for alternative fund managers are their liquidity profiles and the availability of assets, respectively.

Besides, the present economic climate introduces a unique set of difficulties for these professionals.

Raising capital

Interestingly, the study reveals a clear preference in capital raising methods among fund managers. Private placement is the most popular choice, with 83% of respondents intending to use it in the following 18 months.

Alternative investment fund (AIF) marketing is the second most preferred capital-raising strategy, with almost half (47%) of fund managers planning to use it in the next 18 months.

In contrast, even though brokers’ expertise is the third most valued method, only a third (35%) of alternative asset managers plan to use it for raising capital over the next year and a half.

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