Retail investors are embracing publicly registered “liquid-alternative” mutual funds and ETFs at an astonishing rate, according to a recent survey conducted by Citigroup’s Prime Finance Unit. In the U.S., Citi projects that retail demand for liquid-alt funds will increase assets under management from $259 billion in 2012 to $779 billion by 2017 (a CAGR of 25 percent). The total global market for liquid-alt funds is expected to reach $1.3 trillion by 2017, and more than 70 percent of this will be retail.
Independent Registered Investment Advisers (RIAs) are driving liquid-alt growth. As Citi notes: “These advisors have an open architecture approach to product and are active in supporting new (liquid-alt) fund launches.”
Who will manage the rapidly growing pool of liquid-alt capital? Citi says money management groups will recruit successful hedge fund managers, who then will leverage the same research and strategies they offer institutions through less liquid and more expensive privately offered hedge funds.
Of course, there are no obstacles (other than inertia) that will keep institutions from accessing the same liquid-alt funds, with the help of independent RIAs.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
