Resolving the Fragmentation in the Alternative Investment Industry
The economic volatility and disruption of the past year, the expectation of net-zero interest rates for the foreseeable future, and the stronger emphasis on investing in environmental, social, and governance (ESG)-complaint funds, have all contributed to the ongoing rise in interest in alternative investment strategies and products.
Around the world, 81% of investors who were polled by Preqin last year responded that they expect to increase their allocations to alternative investments by 2025. Furthermore, among public pension funds tracked by Preqin, the median allocation to alternatives increased from 18.1% in 2010 to 30.3% in 2020.
Given the global demand for alternative investments, investors need reliable, up-to-date data from alternative asset managers in order to determine the right strategies and products to achieve their goals and diversify their portfolios. However, this is much easier said than done. Historically, the alternative investment space has been an opaque segment of the marketplace where data is shared, and professionals network, within their own silos.
On top of that, many database vendors charge high fees for alternative asset data, and investment banks with this information often have conflicts of interest due to the nature of their business model. Meanwhile, prime brokers’ capital introduction teams tend to introduce investors to alternative asset managers for whom they are incentivized to raise funds.
In short, pensions, endowments, foundations, family offices, and other institutional asset allocators have not had a consolidated platform for accessing unbiased, real-time data on alternative asset managers throughout the alts space, and meeting all of their sourcing needs for these investments—for a minimal fee.
This is the unmet need we are solving. The AXIS platform we launched serves as a one-stop shop where these allocators can access the most recent up-to-date data on alternative asset managers, and streamline the entire sourcing process. All alternative asset managers, from across various asset classes, can join the platform as long as they have a viable strategy that can help investors reach their investment goals. Allocators can take advantage of our cutting-edge visualization and modeling features on the AXIS platform to compare strategy or product performance, and model how an alternative offering would likely function within their portfolios over time.
In addition, our offering includes a social network where allocators can digitally engage with the asset managers they track, and set up virtual or in-person meetings. The capability to seamlessly begin building relationships with asset managers enables allocators to learn more about the assets and strategies the former offer, and discuss the differentiators of a particular asset or strategy.
Nearly three-quarters (73%) of investors polled by Preqin last year cited inconsistent reporting from managers as a challenge they associate with investing in alternatives. By delivering access to real-time data on alternative asset managers, and enabling continuous communication with those managers, our AXIS platform is bringing much-needed transparency to alternative investing—and our status as a third party with no alternative investment strategies or products of our own gives investors peace of mind that the information they receive is truly in their best interest.
As investor interest in, and asset allocations to, alternatives continue to rise, our AXIS platform provides what the alternative investment space has been lacking for too long—one centralized portal with seamless access to accurate, unconflicted data on alternative asset managers, and easy engagement with those managers. Finally, the fragmented alternative investment universe is coming together on one unified offering to help investors make well-informed alternative investing decisions.
Learn more about how you can maximize the AXIS platform for your business needs.