iConnections Observations

At the end of January 2022, approximately 2200 investment professionals from around the globe gathered for the inaugural iConnections Global Alternatives Investment Conference.  Despite wide ranging investment philosophies and geographies, there were multiple common themes amongst the delegates.

Institutional investors are taking a long look at firms that have diversity and inclusion (D&I) mandates.  Investments in funds that are operated by female and/or minority-owned managers have become a priority for many investors.  Naturally, funds will still have to pass necessary due diligence procedures; however, a D&I mandate can be an advantage to getting an initial meeting on the table.

Cryptocurrency investing is here to stay.  The asset class continues to gain momentum as a recognized asset class by investors.  The larger cryptocurrency funds continue to attract the bulk of the investments; however, many established fund managers are launching new products that include crypto investing and could attract significant investments in the coming years.  In addition to established managers, many emerging managers are entering the space as well.  Asset raising may be more difficult for them, yet the amount of money going into crypto funds seems to be rising exponentially.  There were mixed reviews on whether this trend will continue.

Similar to D&I, the rise of funds with environmental, social, and governance (ESG) criteria as part of their investment strategy have started to gain traction with investors.  While positive investment return as well as capital preservation remain paramount to investors, doing good for the planet and its inhabitants has gained momentum to become a priority.

Naturally, one could not escape conversations around the COVID-19 pandemic.  Return to office, continuation of working from home (WFH), and hybrid work models going forward are at the top of everyone’s mind.  One thing that seems nearly certain is that most firms are unlikely to return to a five-day-a-week office requirement.  Return to “normal” seems unlikely for many years to come. 

Other topics of note:

• Scrutiny of cybersecurity policy is becoming an increasingly larger part of an investor operational due diligence exercise.
• Funds that hold both public and private securities, so-called hybrid funds, continue their rise in popularity, offering investment diversity that many investors desire.
• It is anticipated the venture capital funds will continue to attract capital at a faster pace than many other strategies for several years to come.
• SPACs, real estate, private credit and investment in cannabis companies (public and private) will continue to attract investor attention and could become important parts of many portfolios.

Lastly, previous conferences that took place during so called “hedge fund week” in Miami focused almost exclusively on investing in the public markets.  This year, possibly due to the line blurring between hedge and private equity funds, there was considerably more focus on private markets than ever before.