Over the past year, from Q2 2022 to Q2 2023, Crystal’s platform saw $148 million in new assets to the platform, a growth of 24%. As of Q2 2023, the new inflows to the platform were split between hedge funds (65%) and private markets (35%).
Hedge Funds
The most popular strategies in hedge funds were long/short equity and global macro, growing by 16% and 13% respectively over the quarter. Other strategies which saw growth in Q2 were equity market neutral (5%), relative value (3%), multi-strategy (2%) and managed futures (1%).
On a year-on-year basis, the most popular hedge fund strategy by far was global macro, which saw a 93% rise. The second and third most popular strategies were equity market neutral (38%) and long/short equity (34%).
| Strategy | Q/Q Growth | Y/Y Growth |
|---|---|---|
| Long/Short Equity | 16.17% | 34.10% |
| Global Macro | 13.37% | 92.93% |
| Equity Market Neutral | 4.56% | 38.46% |
| Relative Value | 2.70% | 10.62% |
| Multi-Strategy | 1.50% | 14.70% |
| Managed Futures | 0.96% | -42.34% |
| Long Bias | -0.68% | -15.23% |
| Event Drive | -1.82% | -39.79% |
| Distressed | -2.59% | 7.47% |
| Activist | -8.34% | 7.89% |
| Credit | -32.03% | -43.02% |
Note: Strategy flows exclude performance and are purely based on asset inflows and outflows.
Private Markets
The most popular strategy in private markets was growth, which rose by 7% over the quarter. Other strategies which saw growth in Q2 were private credit (5%), buyout (2%) and venture (2%). Real assets saw no growth over the quarter.
On a year-on-year basis, the most popular private markets strategy by far was private credit, which saw a 136% rise. The second, third and fourth most popular strategies were growth (32%), buyout (27%) and venture (23%). Real assets saw no growth over the year.
| Strategy | Y/Y Growth | Q/Q Growth |
|---|---|---|
| Growth | 32.31% | 6.60% |
| Private Credit | 135.54% | 4.85% |
| Buyout | 27.12% | 2.49% |
| Venture | 23.16% | 1.93% |
| Real Assets | 0.00% | 0.00% |
Note: Strategy flows exclude performance and are purely based on asset inflows and outflows.
Advisor Demand for Alternative Investments in 2023 - SurveyMonkey Dashboard
To gain a deeper understanding of advisor sentiments, Crystal Capital Partners conducted a survey of 51 independent financial advisors.
Demand
Asset Classes
Asset classes: Over 60% of advisors surveyed are currently allocating to private markets for their clients and over 35% are allocating to hedge funds. Over 20% are allocating to both.
Barriers
Barriers: Of those who are not seeing increased demand, 50% indicated this was because of lack of liquidity, while over 40% said this was due to the complexity of the subject matter. Other reasons include longer lock-up periods (over 30%), clients not being interested (15%), higher risk (over 20%) and higher cost of entry (under 10%).
Benefits
Benefits: Of those who are seeing increased demand, the majority noted diversification (over 85%) and higher returns (almost 70%) as reasons that they allocate to these asset classes. Other reasons include lower volatility (50%), reduced risk (over 40%) and tax benefits (25%).
Future Plans
Almost 70% of advisors are looking to increase their
clients’ allocations to alternatives over the next year.
Hedge Fund Strategies
Future allocations to hedge funds: Of those looking to increase their allocations, most advisors are considering increasing allocations to credit hedge fund strategies (over 60%) and equity long/short (over 50%). Other strategies which advisors are looking to increase their allocations to include multi-manager/multi-strategy (45%), funds of funds (over 25%), managed futures/CTAs (over 20%), event driven (over 20%), market neutral (under 20%), relative value (under 20%), macro (under 10%) and digital assets (under 5%).
Private Market Strategies
Future allocations to private markets: Of those looking to increase their allocations, most advisors are considering increasing allocations to private equity (65%), private credit (over 60%) and real estate (60%). Other strategies which advisors are looking to increase their allocations to include natural resources (40%), infrastructure (35%) and venture capital (30%).
Commitments
Upcoming commitments: Over the next year, over 50% said they were planning to allocate up to 10% to alternative investment strategies, while over 40% said they were planning to allocate between 11-25%. Under 5% said they were planning to allocate between 26-50% and under 5% said between 76-100%.