The growth of investment funds continues: good news!

The growth of investment funds continues: good news!

Investment funds still on the rise! The International Organization of Securities Commissions (IOSCO) survey at the beginning of the year showed a change. This organisation brings together the regulators of the world’s major stock exchanges and meets once a year.

  • In closed-end funds, physical assets, particularly real estate, dominate ahead of stocks and corporate bonds.
  • As for hedge funds, the number of hedge funds increased by 19 compared to 2018 and assets under management increased by 6 compared to 2019.
  • Among the 61,120 open funds analysed, equity funds are the most represented type of fund.

According to Jean-Baptiste Magnen, Co-founder and Managing Partner of Chetwode:

1. The growth of investment funds relates to that of finance alternative

“The significant growth of the investment fund market is part of the development of the alternative finance market, not in opposition to, but as a complement to, the banks, which are now limited in their capacity to support business growth by the prudential ratios (known as “Basel”) that apply to their lending activities to the economy. Investment funds therefore represent a very effective means of directing savings towards financing the economy in the medium and long term, i.e. investments, while banks are more generally devoted to financing short-term operations, illustrating this complementarity”.

2. Companies have adapted and manage banking and non-banking relationships

“Companies have now integrated this duality and manage in parallel their banking relationships (often within a single pool or syndicate grouping several banks and represented by an agent bank) and their non-banking relationships with alternative financial partners, be they venture capital funds or debt funds. This is done both to diversify their sources of financing and to adapt them as well as possible to their needs. It is interesting to note that in North America, non-bank financing represents nearly 80% of total corporate resources, while in continental Europe it is almost the opposite… but as we have seen, this ratio is evolving towards a strong increase in the share of alternative financing”.

Find here all the information on our financing solutions and the funds adapted to your investment project:

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