At the Tipping Point

Disruption and the pace of change in the alternative asset management industry

EY’s 2018 Global Alternative Fund Survey
Originally published in the January 2019 issue

Executive summary

Sweeping change has taken hold of the financial services industry: robotics and artificial intelligence (AI) are fundamentally changing the relationship that financial institutions have with end users, the vast proliferation of data is changing the way that institutions ultimately make business decisions, and the skill sets that are needed to drive the business forward are changing the mindsets of those who occupy the corner office, fundamentally changing the way that they conduct business. With this as a backdrop, it is a certainty that the pace of change will continue to gain momentum. And as with other segments of the financial services landscape, the alternative fund industry now finds itself at that defining moment as well – a tipping point in its evolution where disruptive technology represents a virtual signpost on the road to future success.

In the current environment, alternative asset managers have been busy evaluating how rapid technological innovation, changing demographics, convergence of industries and other factors have been and will continue to reshape their business.

The asset managers who are out in front are those that are developing a strategy to embrace technology, becoming more nimble and efficient. Businesses who understand that their customers have unique demands and expectations are becoming successful in maintaining and growing relationships. Employers who recognize that millennials comprising today’s workforce want different experiences and benefits than those sought out by Gen X before them are able to attract and retain best-in-class talent. Ultimately, those firms that are able to juggle all of these disruptive dynamics are thriving. And those that have ignored many of these trends, hoping that each would be a passing phase, are waking up to the reality that they are playing catch-up in the race to understand and address how disruption is reshaping nearly every facet of the asset management industry.

We hope the observations and findings of this, EY 12th annual Global Alternative Fund Survey, will help contribute to an ongoing and healthy dialogue that promotes the continued development and advancement of the global alternative fund industry. This year’s survey uniquely sought out the points of view of both hedge fund and private equity managers, as well as institutional investors who allocate to both asset classes as well as broadly across alternatives. We would like to express gratitude to those managers and investors who provided thoughtprovoking viewpoints into the direction and development of this survey, as well as offer thanks and appreciation to the more than 200 managers and 60 investors who gave their time and insight to provide such robust results. We believe this combination of perspectives provides invaluable observations that will continue to drive the industry forward.


EY’s 2018 Global Alternative Fund Survey