This focus means most managers have implemented corporate ESG policies and more than half are embedding ESG factors into their investment decisions.
Regulatory compliance is also a heightened focus for asset managers.
Among surveyed hedge fund managers, 40% reported that they expect their budget for compliance and/or regulatory processes to increase 5% to 10%, with another 18% of managers expecting their budgets to increase more than 10%.
But 44% of respondents believe the regulatory proposals facing the private fund industry have costs that outweigh the benefits. This means that those with small-to-midsized assets under management (AUMs) may be disproportionately affected by the additional costs.
“While the financial industry has come a long way since 2008, the findings from this year’s Global Alternative Fund Survey suggest that there’s still much to be done if many of these boutique managers are going to be competitive in an industry undergoing increased consolidation,” added Jun Li, EY Americas Wealth & Asset Management Co-leader.
