What You Need to Know
- Forty-one percent of alternative investment allocators said they expect their firms to increase allocations to cryptocurrencies and other digital assets this year,
- Direct fund investments remained the most popular, with 93% of respondents allocating directly into a commingled fund.
- Ninety-three percent of participants consider investment process the most important consideration when their firms source managers for allocations.
Forty-one percent of alternative investment allocators in a new survey said they expect their firms to increase allocations to cryptocurrencies and other digital assets this year, a huge increase from the 12% who said this in 2021, Seward & Kissel, a law firm, reported Monday.
In addition, 48% of participants said their organizations do not invest in digital assets, down from 69% in 2021.
“While the increase in interest year-over-year by investors for digital assets is dramatic, as outlined in the survey, we are not surprised by these findings as many of our existing clients have expressed interest in exposure to digital assets, either as a direct investment in cryptocurrencies or as private investments in the digital asset ecosystem,” Daniel Bresler, an investment management partner at the law firm, said in a statement.
Seward & Kissel distributed the survey to personnel who work at various types of investment allocators, irrespective of location or the amount of investable assets: 33% high-net-worth individuals/family offices; 27% funds of funds; and 10% each endowments, foundation and nonprofits, investment consultants and seeders.
Of the different methods that allocators use to invest client dollars, direct fund investments remained the most popular in the new survey, with 93% of respondents allocating directly into a commingled fund, up from 86% in 2021.
This year as well, co-investment vehicles, including special purpose vehicles, surged, with 38% of participants using them, compared with 28% last year.
The survey found that investors continue to allocate to emerging managers. Seventy-three percent of participants said their organizations invest in alternative investment managers founded less than two years ago, down from 80% who said this last year.