KPMG’s 2016 report on women in alternative investments finds that a majority of respondents still believe it is harder for women to succeed in the industry and to obtain capital than it is for their male peers.
But that sentiment belies a significant increase in the percentage of mandates and programs owned and managed by women, up from 2% in 2013 to 10% this year.
Many participants in the study expressed optimism, with nearly a third planning to launch or manage a new fund in the next five years, and, of women-owned and -managed funds, a quarter planning to grow their fund to more than $1 billion in assets under management.
KPMG said new efforts were afoot to increase the pipeline of women going into alternatives. Novel initiatives are designed to better retain and advance women. And more investors are considering diversity when making allocations.
The report incorporated insights from an online survey of 791 alternative investment professionals globally conducted in the second quarter, followed by interviews with industry leaders in the third quarter.
Professionals at hedge fund firms represented 29% of the survey population, 24% at private equity and venture capital firms and 7% at private real estate non-REIT funds. Investors comprised 10% of survey respondents. Other respondents, including service providers, represented 30% of the survey population.
Macro and Sector Outlooks
Nearly half of fund and investor respondents believe the global economy was in late cycle. Before the Brexit vote, 25% said they expected Europe’s five-year growth rate to decrease. After the vote, 51% of respondents expected a declining growth rate.
Forty-seven percent respondents expected China’s growth rate will decrease in the next five years.
The outlook for hedge funds over the next 18 months was mixed, according to survey respondents. On the one hand, 40% expected performance and investment opportunities for hedge funds to improve most among all sectors surveyed (private equity, venture capital and real estate).
Yet hedge funds can expect to take the hardest hit in allocations, with 18% of investor respondents planning to decrease allocations to the sector over the same time frame.
Thirty percent of respondents said private equity performance would improve over the next 18 months, with investment opportunities looking stronger to 41% of respondents.
Among all sectors surveyed, private equity promised to fare best in investor allocations, with 30% of respondents planning to increase investments in the sector.
Venture capital’s outlook was not as strong. Only 26% of respondents expected improved investment opportunities, and just 20% anticipated improved performance over the next 18 months. Nevertheless, only 5% of investor respondents planned to cut back allocations to the sector.
Private real estate funds will face a challenging investment horizon and performance outlook, as less than one-fifth of respondents looked for conditions to improve over the next 18 months. However, 22% of investors planned to increase their real estate allocations during that period.