Key Takeaways
- • Convergence reports the alternatives industry grew solidly in 2016 across all segments and factors it tracks, based on changes observed across 17,500-plus advisers, 53,000-plus private funds and 6,000-plus service providers.
- • Adviser and manager formation, hiring and fund launches increased in 2016, and the number of service providers serving the industry grew, according to Convergence's Q4 2016 update.
- • Regulatory actions increased over the period, per the same update.
- • Hedge funds drew the most negative attention in 2016 after high-profile closures, scandals and performance problems prompted investors to withdraw capital or suspend allocations.
- • Investor capital was redirected away from hedge funds toward private equity, real estate and venture capital, even as managers in all segments grew.
Summary
The alternatives industry grew solidly in 2016 across all segments and factors tracked by Convergence, according to the firm's Q4 2016 update. Convergence measures overall industry health by analysing changes it observes across more than 17,500 advisers, 53,000 private funds and 6,000 service providers. The update found that more advisers and managers were formed, and that these firms hired more staff and launched more funds. The number of service providers serving the industry also rose, and regulatory actions increased over the year.
Hedge funds were the segment that drew the most negative attention in 2016. A series of high-profile closures, scandals and performance shortfalls led many investors to withdraw capital or suspend allocations to the asset class. Even so, managers across all segments continued to grow. Convergence observed that new capital allocations shifted away from hedge funds and toward private equity, real estate and venture capital.
John Phinney, chairman and co-founder of Convergence, said the firm's research, surveillance and analytics give advisers, service providers and institutional investors the transparency needed to manage risk, grow and protect revenue and increase profitability. George Evans, co-president and co-founder, said the firm helps firms make better decisions with its data and offers an alternative to legacy options in the marketplace.
Hedge funds were the segment that drew the most negative attention in 2016. A series of high-profile closures, scandals and performance shortfalls led many investors to withdraw capital or suspend allocations to the asset class. Even so, managers across all segments continued to grow. Convergence observed that new capital allocations shifted away from hedge funds and toward private equity, real estate and venture capital.
John Phinney, chairman and co-founder of Convergence, said the firm's research, surveillance and analytics give advisers, service providers and institutional investors the transparency needed to manage risk, grow and protect revenue and increase profitability. George Evans, co-president and co-founder, said the firm helps firms make better decisions with its data and offers an alternative to legacy options in the marketplace.
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