Fitch Ratings warns investment managers face 'deteriorating' outlook in 2024
Fitch highlighted that traditional and alternative investment managers face different challenges in the year ahead, particularly as growth continues to tighten.
In the last year, the sector has seen one traditional investment manager, Anima Holding, upgraded from BBB- stable to BBB- positive, while one alternative investment manager, EQT, was upgraded from A- negative to A- stable.
Two alternative investment managers, Fortress Investment Group and Investcorp, saw its ratings downgraded by Fitch, from BB positive to BB stable and BB stable to BB negative, respectively.
Fitch said traditional and alternative investment managers face different challenges in the year ahead, particularly as growth continues to tighten.
AVI Global sees 'fertile hunting ground' in UK investment trust sector
«Traditional IMs are more immediately exposed, as declining performance and net outflows reduce net asset value-based fees, while alternative IMs' fees are more insulated given typical fee and fund structures,» said the firm.
However, it noted that a high volatility environment with higher interest rates seemed to be increasing market appetite for traditional and more liquid investments, with increased competition and muted fundraising and deal activity also pulling down alternative managers.
The firm described private credit as a «notable growth opportunity» for alternative asset managers, citing an expected increase in banking regulation for traditional debt markets as a headwind, along with continued demand for yield from insurers.
The ratings agency noted that as alternatives managers expand towards retail markets, they may be limited by distribution partners' capacity, as well as attracted regulatory scrutiny and oversight. Meanwhile,
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