The Alternative - Lift-outs, APAC real estate funds, ESG data, private debt and more
Welcome to our final edition of The Alternative for 2023, rounding up the latest trends and opportunities in the alternative assets sphere. I'm finding it hard to believe we're so close to the end of the year already.
Our headline feature in this issue is a unique whitepaper providing everything you need to know about lift-outs , a growing trend among GPs looking for a happy medium between building the necessary administrative teams in-house and outsourcing wholesale to a third party provider.?
Also in this edition is an insightful report co-produced by Goodwin, KPMG and IQ-EQ on the state of play in APAC private real estate funds , along with articles on private debt trends , UK private REITs , ESG credentials and avoiding greenwashing by Novata , a detailed whitepaper by Citisoft and IQ-EQ on data in alternatives , and an LP survey from Brackendale Consulting.
What a year it has been for IQ-EQ. We've had a flurry of recent award wins including the European Private Markets Fund Administrator of the Year at the 2023 Funds Europe Awards. We've completed two landmark acquisitions in Asia making us the largest independent regulatory compliance firm in the region, and we've significantly added to our local offering in the United Arab Emirates with a new office in Abu Dhabi licensed to provide fund administration services. We were also delighted to secure a major mandate with Flexstone Partners in August, which included welcoming a first-rate administration team to IQ-EQ.
I'd like to say a big thank-you to all our contributors for this issue, and of course to our clients and contacts for your continued support. If you’d like to find out more about any of the topics covered in this newsletter, please do get in touch. Otherwise, happy reading!
Yours sincerely,
Justin Partington
Group Head of Fund and Asset Managers
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Lift-outs: continuity and confidence for you, your team and your investors
In trying to keep up with evolving regulations, increasingly demanding stakeholders, rapidly advancing technology and persistent market volatility – on top of the everyday pressures of investing – fund managers are finding themselves at a crossroads, wondering whether to invest heavily in the necessary in-house functions or cut ties with their own support teams and outsource to a specialist fund administrator. However, there is a third option: the lift-out.
Lift-outs, where an embedded operational team is ‘lifted out’ and transferred to a specialist provider, are growing in popularity but not always well understood. So we asked private markets consulting firm Wagtails to collaborate on a new whitepaper to demystify and bring the lift-out concept to life.
This unique paper lays out clearly the various moving parts of a lift-out and, using a detailed case study example, the best practices that can help managers move forward with confidence once they’ve made the decision to pursue the lift-out option.
Click below to browse the whitepaper today, and if you’d like to find out more please contact Justin Partington or Neil Synnott
?Why the new ESG stories must be grounded in data
As money has poured into ESG investments, cynics see companies and investors as having rushed to take advantage, willfully misrepresenting their credentials in the process. While there have certainly been instances of clumsy claims, it's undeniable that the last decade has marked a sea change in how we consider the impact of investments on people and the planet. To better prove themselves, investee companies and asset managers are moving to a new stage in their thinking: how to take a perceived qualitative good and turn it into a provable and standardised data story that can be used to report, benchmark and measure progress?
In this article published by Global Investor, Lyons O'Keeffe analyses why (and how) ESG credentials are now being sourced from data rather than marketing brainstorms, and what this means for the future of ESG reporting.
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State of Play: Current trends in APAC private real estate funds
The global real estate market continues to grow and the same is true within Asia-Pacific. When it comes to global real estate trends, however, there is significant variance across the APAC region – and, as reflected in an insightful new report co-produced by IQ-EQ, Goodwin and KPMG , this is directly impacting APAC-focused private real estate funds.
Our in-depth report, led by Neil Synnott on the IQ-EQ side, harnesses the insights of 40+ industry professionals interviewed throughout August 2023 to provide a timely and valuable snapshot of the current landscape of the APAC private real estate funds industry, including comprehensive analysis of the region's key trends and market dynamics that we hope will help investors and industry professionals make informed decisions.
Private debt: a silver lining in times of crisis
Financial crisis is a normal cycle of the financial markets; it often coincides with increased intervention from regulators using monetary policies to rectify the current imbalance. The current situation of rising inflation and steadily climbing interest rates have helped bring private debt into the mainstream of investment classes as investors seek to avoid the turbulence of public markets. In fact, in every crisis is a silver lining and this is the time for private debt to shine.
In this article, Justin Partington and Joanne McEnteggart explore the reasons behind the dramatic rise in private debt, identify key growth areas, and speculate on the future of this wildly popular asset class.
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The background, requirements and considerations for establishing a private REIT in the UK
Post-Brexit legislative changes have enabled private REIT structures in the UK, opening up diversification and taxation advantages to PERE managers.
In this article, Joe Woodbury summarises the background to the regulatory changes, the requirements managers must meet to achieve and maintain REIT status, and key factors to address when reorganising assets into a REIT structure.
Alternative investments: using data to drive growth
Demand for alternative investments has been rising steadily despite ongoing market volatility. However, such a challenging environment also requires managers to make best use of their resources – and data is proving to be among a manager’s most important assets.
How are alternative investment managers and investors leveraging data to drive growth? What are the best practices in data governance and management? IQ-EQ (led by Vera Ningye HUANG ) and Citisoft have collaborated on a new whitepaper to understand specifically what alternative investment firms are considering as they prepare their businesses for the future.?
LP vs GP debate: The cost of playing the game
Earlier this year, IQ-EQ hosted an exclusive webinar in partnership with Brackendale Consulting to further analyse key findings from our 'The Cost of Playing the Game' survey, which examined attitudes towards the costs associated with investing in private equity.
The webinar brought together an LP and a GP to share and debate their views in line with the research. Topics included the industry’s most long-standing practices such as the 2:20 fee model, the amount of influence LPs feel they have when negotiating fees, and whether GP compensation should be linked to ESG incentives.
GUEST POST - NOVATA
The role of data in avoiding greenwashing claims
In a recent analysis of ESG risk incidents, data science firm RepRisk found that?one in five?cases of corporate risk incidents were linked to greenwashing and misleading communications. Higher demand for ESG data is putting a spotlight on sustainability claims, leading to increased scrutiny from regulators, investors and customers.
Novata 's Jessie Miller discusses the significance of quality data in mitigating greenwashing risk and creating value, and outlines four measures to help portfolio companies avoid misrepresenting their sustainability efforts.
?IQ-EQ achieves 'Gold' in EcoVadis ESG assessment
In the latest assessment conducted by leading ESG ratings agency, EcoVadis , IQ-EQ is very proud to have been rated Gold. Our scorecard places us in the 96th percentile of the 100,000+ companies rated by EcoVadis to date.
?IQ-EQ opens for business in Abu Dhabi
We're delighted to announce the establishment of operations in Abu Dhabi, UAE, including a licence to offer fund administration services. This marks the next step in the strategic expansion of our footprint and service offering in the Middle East.
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