Commentary: How much of a future does artificial intelligence have in institutional investing?

As artificial intelligence, machine learning, and deep neural networks integrate into institutional investing, their true potential sparks active debates. Read more on some of the compelling questions our LP clients are exploring with Vidrio today. Commentary from Mazen Jabban, Chariman & CEO, Vidrio Financial.

Vidrio and AW survey: Investors’ appetite undeterred by denominator effect

The big bad wolf for anyone worried about allocation to private markets of late has been the ‘denominator effect’, the concern that private markets would stand out as overweight as other parts of institutional portfolios took hits on performance, meaning rebalancing would work against the sector.

Loan Note: Market views on AI's role in private debt; secondaries appetite grows, according to study

Has the impact on private debt fund management been as significant as imagined? Plus: Our Perspectives study evidences secondary market growth; and latest key hires.

OCIOs favor new allocations to private equity and credit

Private equity and credit strategies are set to continue to dominate asset mandates for the next 12 to 24 months, according to a survey of outsourced chief investment officer providers with more than $660 billion in assets under advisement.

Who Benefits When the SEC Spills Everyone’s Side-Letter Secrets?

All investment firms registered with the Securities and Exchange Commission have to share with the regulator the brochures that they give to existing and prospective clients. The literature must be written in “plain English” and include basic information about the firm, including the fees it charges investors. However, those fees are often not what all of their clients pay. Included in virtually every Form ADV Part 2 brochure about fees and expenses is a caveat: The firm has the right to make bespoke arrangements with other clients.

Backlash Hasn’t Kept ESG From Seeping Further Into Asset Management — And Compensation

More asset managers are using ESG to weigh the risk and opportunities of their investments, with some using it to measure employee performance, according to a Vidrio survey. More and more, asset managers are using environmental, social, and governance factors to evaluate investments — in spite of the recent backlash. Some are even using ESG metrics in their compensation plans, according to a report by portfolio management platform Vidrio Financial.

Why are anti-ESG funds like YALL and MAGA losing steam?

Anti-ESG funds typically exclude companies that consider “environmental, social and governance” (ESG) risks, and often attract investors based on their political preferences. The anti-ESG category includes funds such as “God Bless America ETF” (YALL), “Point Bridge America First ETF” (MAGA), and the U.S. Energy ETF of Republican presidential candidate Vivek Ramaswamy’s Strive (DRLL).That political appeal works, although the anti-ESG category remains a David to the ESG’s Goliath: By mid-2023, anti-ESG funds had about $2.42 billion in assets under management, Morningstar reported, 100 times smaller than funds that did integrate ESG factors ($313.4 billion). After reaching a peak in inflows in Q3 2022, Morningstar said, anti-ESG funds such as Ramaswamy’s “quickly lost steam.”

Institutional Investors More Than Doubled Their Hedge Fund Allocations Last Year

“Hedge funds that can take advantage of the current volatility should continue to perform well through the first half of the year,” the report said. “The convergence trend that we observed between hedge funds and private markets several years ago is now accelerating [and] incorporating hedge funds, co-investments, and private markets with drawdown structures.

Global asset managers pour more into alternative investments in 2022

Capital allocations to alternative investments by global asset managers jumped to about $144 billion in 2022 from about $130 billion in the prior year, according to a report commissioned by Vidrio Financial released Tuesday. Read more and download the report on Vidrio here: alternatives-watch-investor-compendium-2023

Quant hedge funds see ‘fertile’ opportunities amid structural market shift

Despite the January slide, quant hedge funds remain well-placed to capitalize on the seismic structural shifts markets this year, according to industry participants on the frontline.

U.S. pension funds at the forefront of real estate/infrastructure allocations in 2021

U.S. pension funds came in as the top allocators to real estate/infrastructure in 2021, according to the second edition of the AW Research Investor Compendium that was recently released by Alternatives Watch Research in association with Vidrio.

Allocators added $130bn to private markets last year

Among the top 10 allocators to alternative investments annualized investment gains spanned 12% to 34%. The new investment commitments put to work, by the largest U.S. public pensions, averaged from $5 billion to $17 billion.

World’s largest allocators added $130bn to private markets last year, says Vidrio research

Mandate activity among the largest institutional investors soared in 2021 across private equity, private credit, real estate and infrastructure, and hedge funds, according to research commissioned by Vidrio Financial, a provider of software and integrated data services solutions for institutional alternative allocators globally.

This Private Equity Fund Was the Most Popular Among Pensions Last Year

New research shows the top pensions allocating capital to private markets — and their favorite funds of 2021.

The Surprising Reason ThatAllocators Are Embracing ESG

Boards and stakeholders — not the promise of stronger performance — are driving ESG investing, new data shows.

Vidrio Financial Launches Portfolio Capability Updates for Asset Allocators

These enhancements include more flexible portfolio and manager monitoring service bundles, a more intuitive interface, evolved multi-asset class integration of Vidrio’s hedge fund and private capital markets capabilities.

Transparency and Trust are a Must for Meaningful Institutional Investor Crypto Adoption

We are still a long way from seeing meaningful institutional investor uptake in crypto and crypto-related offering and something as simple as greater transparency will go a long way to providing the peace of mind institutions need.

Institutional Investors Stay Cautious on Crypto, as Hedge Funds Ride Bitcoin Volatility

As hedge funds continue to ride out cryptocurrencies’ volatility, new industry research suggests larger institutional investors remain reluctant to pile into digital assets in any meaningful sense, despite the strong returns generated by managers this year.

Vidrio: Investors anticipate ‘hybrid’ due diligence going forward

Investors are not likely to return to in-person due diligence meetings in the coming year, according to new findings of a survey conducted by fintech firm Vidrio Financial.

The “New Normal”: How Virtual Conferencing Has Optimized Investor Due Diligence During Covid-19

The “fluidity” of virtual conferencing has proved a “silver lining” during the pandemic, optimising allocator time during the investor due diligence process, according to new research by alternatives-focused software-as-a-service and data management company Vidrio Financial.

Investors Bullish on Commodity, Macro Opportunities in Current Market

Institutional investors may look to boost their hedge fund allocations this year in commodity funds and macro vehicles, the top selected strategies from a survey conducted by Vidrio.

Investors push into alts to battle inflation

A new survey of global allocators and LPs found that roughly 20% have yet to make adjustments to their alternatives exposure and are likely to do so as inflation is expected to inch higher.

Hedge Fund Assets Near USD4 Trillion as Fresh Inflation Fears Push Investors Towards Alternatives

Growing numbers of investors are turning to hedge funds to protect their portfolios in the face of inflationary fears, with total industry capital swelling to almost USD4 trillion and more allocators set to tilt towards alternative assets, new research shows.

This Tech-Focused Manager Is Pensions’ Favorite in Private Equity

When it came to private equity, pension funds invested the most money with Thoma Bravo in 2020, followed by CVC Capital, new data shows.

U.S. Pension Funds Led Capital Allocations to Alternatives in 2020

Some $103 billion in capital allocations across 600 investment mandates were made to alternativeslast year, according to a new study by alternatives technology provider Vidrio Financial.

Vidrio Financial Aims New Vidrio ‘One’ Platform at a Broader Range of Alternative Investment Allocators

Vidrio Financial, a provider of software and data services for institutional alternative allocators globally, has launched Vidrio ”One,” its first non-enterprise offering driven by increased demand from a broader range of institutional investors to allocate across the alternatives landscape.

Who Benefits When the SEC Spills Everyone’s Side-Letter Secrets?

All investment firms registered with the Securities and Exchange Commission have to share with the regulator the brochures that they give to existing and prospective clients. The literature must be written in “plain English” and include basic information about the firm, including the fees it charges investors. However, those fees are often not what all of their clients pay. Included in virtually every Form ADV Part 2 brochure about fees and expenses is a caveat: The firm has the right to make bespoke arrangements with other clients.