Alternatives Fund Formation Buoyed by Technology Innovation, Regulatory Changes to Serve Increased Investor Demand

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In their first joint annual "Fund Formation Trends Survey" Sudrania Fund Services and LaunchPad Creative found an overwhelming trend of new fund launches dominated by private equity and credit strategies, prompted by strong investor demand and asset flows.

In their first joint annual "Fund Formation Trends Survey" Sudrania Fund Services and LaunchPad Creative found an overwhelming trend of new fund launches dominated by private equity and credit strategies, prompted by strong investor demand and asset flows.

The survey was conducted by specialist research firm Alternatives Watch via email from mid-December 2020 through January 2021 and included 90 global law firms specializing in alternative investments. One-on-one conversations were held with 20 firms, based mostly in the U.S. and Cayman Islands, about expectations for new fund launches among clients.

Lawyers specializing in alternative investment strategies revealed that the most likely arenas for new fund launches over the next 12 to 18 months will be private equity (26%) and credit strategies (26%), followed by long/short equity hedge funds (21%), (11%) for real estate and ESG and (5%) for crypto related funds.

Nilesh Sudrania, Founder and CEO of Sudrania Fund Services, said, “We have observed growing interest in the digital assets realm and private equity space, and as noted in the survey, law firms are increasingly working with digital asset fund launches. Going into 2021, we are excited to work with fund managers eyeing a variety of new fund investment strategies, including Special Purpose Vehicle (SPVs), digital asset funds, and hedge funds through our cloud-based Seamless Solutions platform,” he added.

"Our experience over the past twelve months supports the survey findings," said Kristin Steele, Founder of LaunchPad Creative, LLC. "We partnered with fund managers that employed various fund structures and investment strategies, including a large number of private equity, real estate, and venture capital funds, to craft their unique stories into compelling pitchdecks. We look forward to building on this momentum through 2021, offering our expertise to established and emerging managers as they bring new ideas and strategies to market."

“The popularity of private equity and credit funds lines up with the fund raising we tracked at Alternatives Watch last year,” commented Susan Barreto, Editor of Alternatives Watch. “Of the more than $323 billion we tracked in alternative investment capital fundraising in 2020, roughly $190 billion was raised by private equity and nearly $80 billion in private debt strategies. As investors clamor for yield in a low interest environment the appetite for alternative investment funds remains strong.”

Other key findings included:

  • Law firms experience in dealing with crypto strategies is growing. The majority (66%) of lawyers in our survey reported working within the digital asset space currently.
  • The most popular fund structure among investment firms in 2021 will be the limited partnership, with (39%) of lawyers saying will be the most often used when launching a new offering this year.
  • Separately managed accounts were the most popular structure among (26%) of law firms, while only (16%) expected co-investments to be the prevalent offering this year.
  • Four out of 10 lawyers surveyed said that investor location was the biggest determining factor among managers’ deciding on a type of fund vehicle.
  • A close second is regulatory regime, which (20%) selected as a top consideration in selecting an optimal fund offering structure.

 
Click here to view the full survey results: https://www.alternativeswatch.com/2021-fund-formation-survey/.

About Sudrania Fund Services

Sudrania Fund Services is a global fund administrator based in Chicago, Illinois that leverages its proprietary Seamless platform, an award-winning, full-scale cloud-based, fund administration application which integrates portfolio, fund accounting and investor reporting, in order to provide best-in-class and cost-efficient solutions to both the traditional and alternative investment fund management community. Seamless Solutions can process high-frequency trading volumes to deliver daily NAV for hedge funds, cryptocurrency funds, SPVs, mutual funds, private equity funds, impact funds, commodity pools and mortgage funds. Sudrania’s operations and technology are SOC 1, SOC 2, and SOC 3 audited, and it currently has over 325 staff across its seven offices globally. Visit https://sudrania.com/ for more.

About LaunchPad Creative

LaunchPad Creative partners with financial services firms on tailored integrated marketing, brand design and social media initiatives, launching them into their next phase of exponential growth. We pride ourselves on delivering strategic innovation, creative design and content, crisp execution and marketing campaign analytics to help our clients realize ROI from their marketing strategies. Our unique advantage is that we are solely focused on helping financial services firms develop and execute their marketing strategies. With over twenty years in the industry, we understand the marketplace and speak the lingo. Learn more about LaunchPad Creative on our website and follow us on LinkedIn. Visit http://launchpadcreativellc.hubspotpagebuilder.com/get-to-know-lpc for more.

About Alternatives Watch

Alternatives Watch, a research and daily news platform dedicated to the rapidly growing world of alternative investments geared toward sophisticated investors. We cover investor mandate activity as well as manager news across private markets including hedge funds, private equity, private credit, infrastructure and real estate. With thousands of investment strategies to choose from with billions of dollars up for grabs, AW provides the most accurate and timely snapshot of this disruptive and entrepreneurial segment of asset management. Visit https://www.alternativeswatch.com/ for more.

For Media:                    
Craig Allen, Managing Principal                        
Allen & Associates Communications         
P: +1 475 419 4468                    
craig.allen@aacomms.net

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