Evolving Fund Strategies: Long-Term Trends as a Key to Success

Examining different investor groups reveals how this trend is reflected:

Asset managers above a certain size often deliberately focus on clearly defined segments, such as real estate (commercial or residential, often in selected markets and across specific investment phases), bonds (regions, sectors, credit quality or duration) and private equity. External asset managers, on the other hand, typically pursue a more broadly diversified approach. For them, efficiently managing client portfolios takes centre stage, often combined with a clear focus on capital preservation and risk management.

Family offices and institutional investors leverage their long-term investment horizons to invest in alternative investments, such as private equity, real estate or hedge funds. Fund structures play an important role here because they enable capital to be pooled, thereby creating access to attractive, often capital-intensive, investment opportunities.

A particularly influential factor in recent years has been the changing interest rate environment. The rise in interest rates since 2022 has led to valuation adjustments, particularly for illiquid investments, which are highly sensitive to interest rates. At the same time, liquid alternatives have become significantly more attractive. Accordingly, we are currently witnessing a shift towards more liquid strategies.

However, this is not so much a renaissance of traditional equity or bond funds. Rather, there is growing interest in specialised fixed-income strategies, such as structured bonds, insurance-linked securities (ILS), cat bonds and convertible bonds. Actively managed equity funds are growing only moderately. ETFs, on the other hand, have established themselves as essential building blocks. Our clients use them to implement clearly defined investment strategies efficiently.

The factors that determine a fund’s success have also changed. A clear strategy, defined target investors and a suitable distribution structure are crucial, while reporting and transparency requirements are increasing simultaneously.

Against this backdrop, efficient and flexible fund structures are becoming increasingly important. While established fund jurisdictions such as Luxembourg or Liechtenstein offer a proven framework for this, they require corresponding lead times. Clear strategic positioning is therefore essential.

As an asset servicing partner, we support our clients in navigating this complex landscape. VP Fund Solutions provides support across the entire value chain, from structuring to operational fund management.

When considering long-term trends, it becomes clear that it is not just the idea that matters, but also its clear strategic direction and consistent implementation within the respective market environment.