bfinance: Manager Intelligence and Market Trends, August 2021

bfinance: Manager Intelligence and Market Trends, August 2021

External manager selection
bfinance identifies the following trends over the last period:

1. As populations in developed markets gradually  gain protection from Covid-19 infection, managers are embracing risk-on positioning despite the regional difficulties created by the ongoing spread of the Delta variant: At the end of Q2 2021, multi-asset managers’ average equity exposure sat nearly 8% above the long- term average.

2. bfinance recorded a remarkable 53% increase in new manager searches through the 12 months to 30 June. Investors are seeking to participate in the global economic recovery and diversify their holdings to address, among other things, inflation and interest rate risks.

3. As the global economic recovery gained ground in Q2, equity markets continued their upward trajectory and active managers struggled to keep pace in terms of performance. The quarter put a pause on the resurgence of the Value style.

4. Private market search activity remained robust in Q2, accounting for 45% of all search activity in the trailing 12 months to 30 June. Industry- wide fundraising statistics indicate that Q2 may be one of the strongest on record, with a total of USD 379 billion raised across all strategies—when all contributions are fully tallied, the final total may actually exceed USD 400 billion, which would constitute a new quarterly record.

5.With inflation rising and the risk of interest rate increases looming on the horizon, fixed income investors have continued to shift from conservative strategies to higher-yielding market segments, such as emerging market debt and US corporate high yield. We have also noted an increased in searches for multi- sector strategies.