Five Takeaways From SS&C Intralinks North America Alternative Investments Regional Summit 202112 August 2021
Direct from the allocators’ perspective: Highlights from a virtual summit on the future of alternative investments.
SS&C Intralinks recently held another in its series of regional summits offering insightful discussion on the future of alternative investments. The focus was on how managers and investors are adapting to — and fostering new directions for — the changing alternatives landscape in North America.
After my brief introduction, the program began with “The Future of Alternative Investments in North America: An Allocators Perspective” moderated by my colleague Meghan McAlpine, director, strategy & product marketing, alternative investments. Joining her were Panayiotis Lambropoulos, portfolio manager, hedge funds at Employees Retirement System of Texas; Sean Bill, chief investment officer at Santa Clara Valley Transportation Authority; and David Barcus, managing director, investments at Denison University.
Here are five key takeaways from the NA Summit:
1. The pandemic has been followed by momentum.
Despite the global health crisis brought on by COVID-19 in early 2020, 2021 has gotten off to a good start, with some positive momentum. Alternative investments have seen significant operational activity in due diligence by investors, high demand for fundraising and a healthy M&A market across the board. However, the effects of the pandemic may still be ongoing due to the challenges of vaccine rollouts and the rise of variants.
2. Technology is showing a role in fundraising.
As a by-product of pandemic times, we may see more capital raising done via Zoom as face-to-face meetings still aren’t possible in much of the world. Though there’s still great equity in live, in-person meetings, managers are using tech to stand out in a highly competitive fundraising environment. Learning their partners’ processes, having all paperwork prepared and sending their returns and projections ahead of time are all part of a new realm in best practices.
3. Technology is leading to more informed decisions.
Aside from aiding in due diligence, technology is also helping to pare down all the “noise,” get better visibility from hedge fund managers and get investors’ questions answered. Technology can also help prevent staff from being poached by the competition. Lastly, the right technology partner becomes crucial to making better allocation decisions.
4. Alternative allocation targets have shifted.
Some of the panelists expressed allocation shifts toward private equity (PE), Real Estate and Infrastructure, and away from Fixed Income. Areas like FinTech and blockchain technology — the foundation of cryptocurrency — have attracted interest as well. Since institutional adoption of cryptocurrency has yet to come to fruition, allocation in this area may not be for everyone. Decentralized finance (DeFi) offers more promise, said one panelist, due to its nature of liquidity. Across the board, however, an emphasis on environmental, social and corporate governance (ESG) is also a vital theme in allocation decisions.
5. Geographically, Asia is an attraction.
A few of the panelists expressed weighted allocation on China — with their economic growth being hard to overlook. At least one panelist expressed that some investors on his board had resistance to increasing exposure in China because of the country’s politics. A secondary interest was in emerging markets and in North America. One panelist mentioned underweighting in developed international markets, the European Union and Japan.
The final takeaway from our summit: Visibility is key in making allocation decisions — and technology is playing a larger role in providing that visibility to fund managers. Better allocation and riding the wave of a more robust alternatives environment means being able to use technology to your advantage, even as a complement to face-to-face partnerships.
My thanks to the panelists for sharing their insights. You can watch the complete summit video on-demand here.
Andy Hoemann is the global head of alternative investments at SS&C Intralinks. He is responsible for global sales, strategy, revenue growth and interacting with various internal and external private markets industry constituents.
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