Clearwater Analytics Study Reveals 55% of Institutional Investors Set to Boost Their Alternative Investments

Rhea-AI Summary

Clearwater Analytics' 2024 State of Alternatives study reveals that 55% of institutional investors plan to boost their alternative investments over the next five years. This research, involving over 230 executives from sectors managing $10 trillion in AUM, highlights trends, opportunities, and challenges in alternative investments. Key findings show that regulatory complexities are a major barrier, noted by 34% of respondents. Additionally, data and reporting are significant operational challenges, with 28% identifying a need for data standardization. The study underscores the important need for technological innovation to manage alternative investment portfolios effectively.

Positive

• 55% of institutional investors plan to increase alternative investments in the next five years.
• 35% of respondents plan to add to their alternative allocations based on current market conditions.
• 72% of respondents indicated a need to improve operational efficiencies, highlighting the demand for innovative technological solutions.

Negative

• 34% of respondents cited regulatory complexities as the leading barrier to alternative investments.
• 24% identified operational burdens and lack of expertise as significant challenges.
• 15% noted access to quality opportunities as a hurdle.
• 28% of respondents pointed to data standardization as a major operational challenge.
• 19% of participants mentioned management and/or client reporting as critical areas for improvement.

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New Research Uncovers Key Trends, Opportunities and Challenges for Institutional Investors in Alternative Investments

BOISE, Idaho, May 30, 2024 /PRNewswire/ -- Clearwater Analytics (NYSE: CWAN), a leading worldwide provider of SaaS-based investment management, accounting, reporting, and analytics solutions, today announced the release of its 2024 State of Alternatives study. The report, encompassing over 230 executive participants from sectors including insurance, wealth and asset management, corporate and government entities, pensions and endowments with $10 trillion in assets under management (AUM), delivers an overview of the emerging trends, opportunities and challenges related to alternative investments.

"Alternatives remain one of the most intriguing asset classes across the institutional investing space today," said Scott Erickson, Chief Revenue Officer at Clearwater Analytics. "As investors continue to scan the alternatives market for opportunities, numerous challenges and trends have come into closer view. The 2024 State of Alternatives study highlights key factors and developments that will shape the alternatives landscape over the short-, medium- and long- term."

Download the 2024 State of Alternatives study today. Key findings in this year's report include:

Institutional Investors Plan to Increase Alternative Investments

According to the study, 55% of institutional investors plan to increase their alternative investments over the next five years, while only 6% said they plan to decrease their alternative investments. In addition, 35% of respondents said that they plan to add to their alternative allocations based on current market conditions.

Regulatory Complexity a Leading Barrier to Alternative Investments

Per the study's findings, over a third of respondents (34%) said that regulatory complexities were the leading hurdle in investing in alternatives, followed by operational burdens/lack of expertise (24%) and limited access to quality opportunities (15%).

Data and Reporting Present Biggest Operational Challenges

Per the study's results, when asked what their biggest areas for operational improvements were, 28% of respondents pointed to data standardization, followed by management and/or client reporting (19%), integration with service providers (19%) and better regulatory reporting (16%).

Most importantly, the survey underscores a pressing need for advancements in operational efficiency and software capabilities. A whopping 72% of responses indicated a need to improve all of the focus areas listed.

"We're not surprised by these findings. They indicate a clear consensus around the importance of innovation in technological infrastructure to support the growing complexity and scale of alternative investment portfolios," said Jonathan Flitt, Global Head of Alternative Investment Solutions at Clearwater Analytics. "Our respondents are unanimous about needing better resources and technology to efficiently manage alternative investments and mitigate the impact of the mentioned barriers."

To learn more about Clearwater Analytics, speak to an expert today.

About the 2024 State of Alternatives Study

Clearwater Analytics surveyed over 230 executives across the institutional investor space, including insurers, wealth / asset managers, corporates, government, pensions and endowments with $10 trillion in assets under management (AUM) during May 2024.

About Clearwater Analytics

Clearwater Analytics (NYSE: CWAN), a global, industry-leading SaaS solution, automates the entire investment lifecycle. With a single instance, multi-tenant architecture, Clearwater offers award-winning investment portfolio planning, performance reporting, data aggregation, reconciliation, accounting, compliance, risk, and order management. Each day, leading insurers, asset managers, corporations, and governments use Clearwater's trusted data to drive efficient, scalable investing on more than $7.3 trillion in assets spanning traditional and alternative asset types. Additional information about Clearwater can be found at clearwateranalytics.com.

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SOURCE Clearwater Analytics

FAQ

What percentage of institutional investors plan to increase their alternative investments according to the 2024 State of Alternatives study?

According to the study, 55% of institutional investors plan to increase their alternative investments over the next five years.

What are the main barriers to alternative investments identified in the Clearwater Analytics study?

The main barriers identified include regulatory complexities (34%), operational burdens/lack of expertise (24%), and access to quality opportunities (15%).

What operational challenges do institutional investors face in alternative investments per the study?

The study highlights data standardization (28%), management and/or client reporting (19%), integration with service providers (19%), and regulatory reporting (16%) as key operational challenges.

How many respondents in the Clearwater Analytics study see a need for improvement in operational efficiencies?

A significant 72% of respondents indicated a need to improve all focus areas related to operational efficiencies.

What role does technological innovation play in managing alternative investments according to the study?

The study underscores the importance of technological innovation in managing the growing complexity and scale of alternative investment portfolios.