Respondents to the latest eVestment alternative fund administrator survey reported a 6.23 percent in growth in assets under administration (AUA), up to $6.37 trillion in the second half of 2013 compared to the first half of 2013.
Increasing direct institutional investment to alternatives continues to support the upward trend in AUA among our survey participants, said eVestment vice president and head of research, Peter Laurelli.
“However many firms cited regulation as a burden driving up costs in technology, which they expect may filter down to investors.”
Survey participants ranked North America as the number one region in which they expected to see business growth in 2014, followed by Asia Pacific, Europe, Latin America, the Middle East, and and Africa.
In emerging markets, respondents cited language barriers and less developed financial sectors as barriers to growth.
Almost 82 percent of respondents indicated that costs associated with servicing alternative investment funds increased in 2013 compared to 2012. Technology topped the list, with 36.4 percent of respondents citing technology as the primary area in which they experienced increased costs.
Asked for the most likely client reactions in the face of rising costs, administrators ranked the statement ‘costs passed on to end investor via higher operational fees’ first, followed by ‘costs retained by service provider/negotiated reduction in fees.’
Survey participants ranked hedge funds as first and foremost in expected industry asset growth in 2014, followed by private equity, real estate, alternative ’40 Act, funds of hedge funds, and alternative UCITS.
