Fund managers are gearing up to ramp up their allocations to buyout strategies and growth capital over the course of the next year, according to report issued this week.

Crestbridge, a global private equity and real estate administration solutions provider, unveiled its latest findings on Wednesday 13 December from its second annual edition of the Crestbridge alternative managers’ mood index (Cammi). This index, designed to gauge the sentiment of alternative asset managers, marks the allocation trends and market strategies anticipated in 2024, as perceived by fund managers themselves.

According to this week’s , the overall Cammi score for this period, spanning all asset classes, stood at 42.37. This figure marked an 11.48 point decline from the previous score of 53.85, indicating a discerning approach by asset managers amidst economic headwinds.

The headline score ranges from 0 to 100, with a score above 50 indicating an increase in allocation as perceived by fund managers compared to the previous month, a score below 50 signifying a decrease and a score of 50 reflecting no change.

Buyouts

Buyout strategies have emerged as the standout performer, garnering the most attention from fund managers since the last report. Asset managers have exhibited a notable uptick in their confidence in buyout strategies, stated Crestbridge, with a notable 42.83% increase in its index score, soaring to 57.14 since March 2023. This surge can be attributed to the perception of undervalued opportunities in the market, drawing interest from both asset managers and investors, reasoned the report.

Growth capital

In contrast, growth capital maintained its resilience, boasting a Cammi index score of 66.66%, which has remained unchanged. Asset managers continue to see value in growth-stage companies, which appear to be less perturbed by interest rate increases and persistent inflationary pressures.

The Cammi report also revealed that all other asset classes experienced a decline, albeit to varying degrees, in their individual Cammi scores. This collective decrease suggests that, on a net basis, fund managers are exercising caution in certain areas, underscored Crestbridge.

Portfolio performance and outlook

The majority of fund managers (89%) reported positive portfolio performance over the previous 12 months. Among them, 33% stated that their portfolios met their expectations, 17% indicated that their portfolios exceeded expectations and 39% noted that their portfolios partially met their expectations. A minority of fund managers (11%) expressed dissatisfaction, stating that their portfolios fell short of performance expectations over the same period.

Alex Di Santo, global head of private equity at Crestbridge, offered insights into the findings, stating, “Our latest Cammi scores reveal a shift in the fund management landscape. Despite a general slowdown with fundraising, deal making and exits we are still seeing strong activity across each of the lower-mid market, mid-market and large-cap spaces. Whilst new challenges have emerged given the current macro-economic environment the general sense is one of positivity in the medium-long term… and private equity is long term.”