The future of alternatives looks strong, with untapped private capital ready to participate in the alts market.
Shifra Ansonoff, Global Head of Customer Experience at Preqin, joins WealthChannel’s Andy Hagans to discuss the opportunities and challenges for GPs who are raising capital from private wealth.
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Episode Highlights
- An introduction to Preqin, and the services the company provides in the alternatives industry.
- Headline data from Preqin’s recent report, including some eye-popping numbers.
- Why alternative asset managers are struggling to raise capital from institutional investors in 2023.
- How much “headroom” exists for increased alts allocation from family offices and High Net worth investors.
- Shifra’s “under the radar” predictions for the next few years, and what investors and sponsors should keep an eye on.
Episode Resources
- Fundraising from Private Wealth: A guide to raising capital (Sample Pages) (Preqin)
- First Close Newsletter (Preqin)
Today’s Guest: Shifra Ansonoff, Preqin
About The Alternative Investment Podcast
The Alternative Investment Podcast is a leading voice in the alternatives industry, covering private equity, venture capital, and real estate. Host Andy Hagans interviews asset managers, family offices, and industry thought leaders, as they discuss the most effective strategies to grow generational wealth.
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Show Transcript
Andy: Welcome to the show. I’m Andy Hagans. And today, we’re talking about fundraising from private capital. I know we have a lot of asset managers and sponsors in the listenership of the show, so it’s a very timely topic. And joining me today, we have Shifra Ansonoff, Global Head of Customer Experience at Preqin. So, Shifra, I think you are the perfect guest to cover this topic today. Welcome to the show.
Shifra: Thank you for having me. Excited to be here.
Andy: Yeah. And I know Preqin, you all have tons of data, and so you have kind of the inside track on some of this information. But for those in our audience who aren’t aware, could you give us a brief introduction to Preqin and your role at the company?
Shifra: Absolutely. Preqin is the leading provider of market intelligence on alternative assets data. And we have relationships. We’ve been in the business for several decades, and we gather information from LPs and GPs globally. We have a huge, comprehensive database of companies’ deals as well. And we also provide insights into the macroeconomic themes that we see based on the data. So, what I’ll be speaking to today is the rolled-up view of where we see alternatives in conjunction with the high-net-worth investor community.
Andy: Yeah, and I mean, you know, the lede, I guess, is nowhere but up, right? But it’s a little more complicated than that, obviously. And, you know, this year, 2023, it’s turning out to be a complicated year, because, on the one hand, I would say, you know, well, I’m host of “The Alternative Investment Podcast.” I’m bullish on alts. And I’m bullish on capital raising in alts. But it’s also, it’s a tough capital-raising environment, you know, in general. Not every asset class, but in general, it’s just a tough environment.
But we’re gonna be looking into this report today, and I’ll make sure to link to this in our show notes, published by Preqin, it’s titled, “Fundraising from Private Wealth: A Guide to Raising Capital.” And the report begins with discussing the challenges right now in raising capital from institutional investors. Why don’t we start with that, Shifra? Could you talk a little bit about that challenge that asset managers, that sponsors are having right now, raising capital from institutions?
Shifra: Absolutely. When we look at our data, we see relatively muted expectations on fundraising and themes in the data. And certainly, we’ve had a very tough 2022. We saw global equity markets drop around 18%, when you look at the MSCI ACWI Index. U.S. bond markets were the worst ever in history, with all the rate hikes. And what that presented a lot of institutional investors was this dilemma, the denominator effect, which we have been talking about.
So, what that is is where you have allocators who have allocations to equities, traditional fixed income, as well as alternatives, all of a sudden, the equity proportion and the fixed-income proportion that the traditional investment drops in value. However, the alternatives component doesn’t drop, at least at the same level magnitude. So, the alternatives proportion has actually overtaken the portfolio in terms of, it’s risen proportionally, and many of the allocators that we speak to have a target allocation.
So, let’s say your target allocation is 15% alternatives. All of a sudden, your other proportions are coming down. You start to exceed your target. And when it gets to that point, while you might wanna allocate to new investments, you just, you really can’t move forward. And many of the conferences that I’ve attended, and I’ve spoken with a lot of allocators, have said, “We’re very interested, but come back to us in 2024.”
So, what this presents is a real challenge. We’ve seen a material slow-down. In terms of just CAGR, 5% CAGR is the expected growth rate for private capital fundraising over the next six years. Just putting that in perspective, from 2015 to 2021, the CAGR was 13%. And prior to that, the incremental years were in the double digits.
So, you definitely seeing it in our numbers. And then regionally, we see North America still is showing the big biggest growth rate of all the regions. Europe is negative, actually, at this point. APAC is far behind. So, it is a challenge, but this all of a sudden presents opportunities to others in the space, other types of institutions, because there’s really a growing market.
In alternative assets, what we’re projecting is that AUM, which is currently at around $13 trillion today, across all asset classes of alternatives, and that includes private capital and hedge fund asset classes, that’s expected to grow at a 9% CAGR, to reach more than $23 trillion in 2027. Massive, huge growth, huge opportunity. But from, you know, near-term perspective, we are seeing these challenges. And even asset classes like private credit and infrastructure, that we know are hot right now, have seen massive slowdowns versus what the levels were before.
Andy: Wow, that’s so interesting. So, even the relatively…because, I mean, private credit is so relatively, it’s just a darling right now, but there’s just, there’s less overall capital I suppose, to be allocated. To your point, institutional capital, fresh capital, I suppose, has dried up because they’re now overweight to their targets within their portfolios, their institutional guardrails, you know, so they can’t just be like, “Well, but we still really like this product, so we’re gonna just tactically go way overweight in alts.” That might get you fired if you manage a pension fund, right? So, you’re not gonna do that.
And then I think what is adding fuel on the fire is some of these alternative products, like, take BREIT. I’ll pick on BREIT. You know, when you compare BREIT to a publicly-traded REIT, well, the publicly-traded REITs are trading at a discount to NAV, right? And they’re marked to market, and they’ve taken that haircut, whereas BREIT relatively hasn’t. So, if that’s in your portfolio, I guess I don’t know how they do valuations internally, like, at a pension fund or institution, but if you have BREIT and you’re showing it at that, you know, sticker price, sticker NAV, wherever it’s at right now, it’s just gonna make that overweight problem even worse, right?
Shifra: Absolutely. And it’s interesting, with the market dynamics now, I mean, I think, year to date, S&P 500 is now up 13%. Some are saying we might be in bull territory. Who knows? We’ll see what happens with the Fed tomorrow. But indications are possibly that they keep things the same, and CPI going down. So we may be reversing that denominator effect, which is the hope. And as we do that, we’ll then see things, sort of, some activity back in the market, both fundraising and deal activity as well.
But another interesting point to hit on, with even, you know, private credit… I actually recently spoke about private debt at one of the conferences, and we were looking at the flows in private debt, and they’re much more concentrated toward the more established managers. So, the first-time fund managers are struggling mightily to raise money.
So, if you’re an LP, if you’re, you know, you wanna tell your board “I’m allocating,” then you better allocate to a Blackstone or a KKR. It’s gotta be an established name. What we saw in our data on the private credit side is that 50% of the capital that’s been allocated has gone to the top 10 managers. Massive, massive concentration now in capital. And that’s not just in private credit, but in other pockets of the market. We see it in real estate, private real estate. We’re seeing it venture, we’re seeing it private equity, heavy concentration to the more-established names in the space.
Andy: Yeah. And, I mean, with institutional investors, that kind of reminds me of the maxim, in tech, of course, but “nobody ever got fired for buying IBM,” right? And so I think that’s, you know, with a lot of institutional investors, you know, there’s, whatever, safety in numbers. You know, everybody’s investing with Blackstone or whatever. I do think that, you know, some of these larger institutional-type asset managers, they’ve had some negative headlines.
And I have to say, on the retail level, when I say retail, I mean smaller family offices, high-net-worth, very-high-net-worth, you know, some of their actions or some of those news headlines have been a turnoff for some of the more mass-affluent or very-high-net worth private wealth. So, let’s shift…and actually, I should say, that’s where I also see the opportunity for these smaller sponsors and the smaller asset managers. You know, you mentioned the startup private credit funds, or the smaller VC funds.
Like, absolutely, they’re struggling, but at the same time, you know, especially with private equity real estate, growth of these 506(c)s, you’re seeing these smaller independent sponsors own the relationship with their LPs. And it, sure, it might be a tough year, but I think they’re gonna come out the other side stronger, and it’s gonna be a little bit more of a balanced ecosystem. Do you think there’s any merit to that?
Shifra: Oh, absolutely. I think there’s a lot of opportunity, and you wanna take hold of it before we see it in our data. You know, valuations are gonna turn around. And, you know, another thing that we looked at from a VC perspective, the early stage shows a lot of opportunity and promise, and that seems to be drawing interest right now. And then the other piece that we’re hearing thematically is secondaries, because you’re further in the J-curve, and there’s, actually, that’s one part of the market I would say is still growing, is the secondaries part of the market.
So, there are abundant opportunities. And even, you know, with real estate, you can’t speak about it in a monolithic way. So, there are different asset classes. Maybe some commercial real estate may be depressed in certain markets, have higher vacancies than others, but there are still opportunities there as well. And when we look at, you know, the multifamily housing, that’s doing well still, logistics as well. So you have to look at things from a comprehensive fashion. You need to work and do your due diligence.
Andy: A hundred percent. And interesting that you brought up secondaries. It almost reminds me, secondaries, right now, remind me of private credit, like, a year ago. An asset class I’m aware of, but I feel like I was hearing it, you know, three times a month, and now I’m hearing about it three times a day, right? But, I mean, here’s the thing. Valuations are more attractive now compared to 18 months, 24 months ago. So, sure, it’s harder to raise capital, but also, depending on the asset class, you’re getting it at a much lower cost basis, much more attractive valuation. I think that’s a lot of the appeal for individual investors.
So, you know, we’ve talked about institutionals, and there’s this pivot now, a necessary pivot, right? I don’t even know that it’s a pivot that all these asset managers wanna make, but when you’re having a tough time raising capital from institutional investors, you’re gonna have to shift, to family offices, to ultra-high-net-worth, to the mass affluent, you know, depending on what type of offerings you have. When did you see that pivot really start in earnest? Is it just that it’s accelerating this year because of those headwinds?
Shifra: No. I mean, I think there have been historical pushes from a regulatory perspective to get more funds into alternatives, whether it’s LTIF in London, UK, that didn’t really take off, LTAF. We’ve been talking about accredited investors for a while. We’d love it in 401(k)s. So, I do think it’s something that we have been speaking about. And depending on the region or market, you know, there are pension funds in Mexico that will allocate to alternatives. There are some regimes that are more progressive, in a way, towards alternatives.
And the U.S. is still a place where it’s being discussed. I do think it’s been probably in the last year and a half that we’ve been hearing about it more predominantly about high-net-worth investors getting into the fray. And Bain Capital actually came out with a study recently, and looking at the opportunity, the TAM of the market, so to speak, about, I would say, at around $130 trillion to $140 trillion in assets is really representing the private wealth space. That’s their whole pool. But…and that’s massive opportunity there. But in terms of the allocation to alternatives, it’s very low.
So, remember, I was saying $13 trillion is our AUM today, when we compute AUM for alternatives. Maybe it’s under $2 trillion, is the private wealth space. So, there’s abundant opportunity when you think about it. And the question is, a big piece is investor education. So, we know we’re getting a lot of demands from clients. “Can you come teach our advisors, teach us how to talk about alternatives?” So, the education is a big part.
There are questions about liquidity, and what is that gonna mean in these longer lockup periods? And so, we need to sort of explain those concepts. How do you reach the advisors? And there are a number of platforms out there as well that do the connection points. There’s B2C, like Moonfare. And then there’s also business-to-business like iCapital, where LPs, effectively, they will connect GPs and LPs on the platform themselves, and they’ll have these feeder funds. So, and then there’s the direct channel, where some GPs are able to reach out directly and court these family offices. So, there are whole levels and strata in our report that we talk about in more detail about how you can do it, and how you approach that.
Andy: And, you know, you mentioned, in the report, you talk about the different strategies you’re seeing from asset managers, from investment sponsors. Where do you see the most momentum? I guess, just due to the nature of this podcast, the events that we run at Wealth Channel, we interact with so many smaller, independent, or mid-sized asset managers who are releasing 506(c) offerings, and they’re owning that relationship between, you know, them as a sponsor, direct to that high-net-worth investor, or direct to that family office.
And to me, I think that’s, you know, I’m kind of a marketing guy, to be honest with you. My interests sit between marketing and finance, and how those things intersect. And I love the idea of these asset managers who can own those direct relationships, because I think that’s a long-term enterprise value, right? That’s equity. But how quickly is that really catching on, that model of sponsors wanting to just directly own that relationship? And again, we’re talking about with accredited investors, not necessarily crowdfunding or anything like that.
Shifra: Yeah. I think certain…thematically, it seems one of the biggest is the direct channel. So, the firms like Blackstone, that actually have the infrastructure to be able to work with these smaller players, smaller ticket sizes, and build that out, that seems to be predominant, but the business to business, like iCapital, that facilitates the flows between GPs and private wealth, is really taking off. So, they have, today… I sound like I’m advertising for them.
Andy: Oh, you know what?
Shifra: It’s okay.
Andy: Yeah. I’ve had iCapital on the show multiple times. We’ve had them at our events. We like iCapital, so don’t be afraid to talk them up. I know they have huge momentum.
Shifra: Yeah. They’re huge. Huge momentum. I mean, their tech creates that connection with the asset manager GPs. They manage over 1,000 feeder funds on behalf of GPs, and they have an extensive research and education team, and they provide a lot of that education.
Actually, I didn’t realize they were only founded 10 years ago, and they have more than 1,000 employees, $150 billion of platform assets, across seven offices internationally. So, you know, they’re really picking that up, for sure. But I feel like the direct channel is probably the biggest today, but who knows in the future where that will lead?
Andy: Yeah. It’s interesting, you know, talking business to business, and iCapital, Case, other platforms like that. The key is is they’ve just made it easier, right? I mean, when I’m thinking about advisors, and I’m not an advisor, but I can certainly empathize with just how much work advisors have to do with client relationships, with reporting, just all of it. And so, it’s like, it’s no mystery why alternative investments really took a while to gain traction, because they were clunky, they were complex. There was a lot of work just to sort of invest in them, and do the paperwork, and track them.
iCapital, Case, those sorts of platforms, have just made it so much easier for advisors to offer alternatives to their clients. So, to me, that was just a fundamental game-changer.
Shifra: Absolutely.
Andy: Well, let’s talk a little bit about family offices. You know, because sometimes I’ll talk with asset managers. They are, you know, dipping their toes, let’s say, the direct channel, and they kind of, family offices, ultra-high-net-worth is where they wanna start, just because the average ticket size, the average check size, so much higher, so they view it as more efficient. But there really aren’t that many family offices, right? In your report, I mean, everyone’s date on this is a little bit different, everyone defines family office a little bit differently, but this sounds about right to me, you know, that Kaya suggested they were in the region of 10,000 family offices globally in 2018. So, this is a while ago, but between 3,000 and 5,000 in the U.S., and so there’s probably a few more than that now. But at the end of the day, that’s, you know, that’s what, four figures, family offices? So, how much success are these asset managers having in reaching family offices with their fundraising?
Shifra: You know, I feel like it’s been something that’s been talked for a while. Looking at the numbers, the proportion is still low, from an allocation perspective. So, I think it’s starting, but I feel like we’re at the beginning, and it’s very early days. You know, one thing that we did look at is how over-allocated or under-allocated different institution types have been, and family offices are the least. They have so much headroom to allocate further, so that seems to be coming through in our data.
Andy: So, Shifra, I’m sorry. Do you actually think that family offices might be behind…
Shifra: Yes.
Andy: …regular high-net-worth, in terms of that.
Shifra: Oh. I was talking about family offices. I was combining it together, family offices and high-net-worth.
Andy: Oh, yeah, yeah. Gotcha. Okay. No, I was… So, to me, the thing with family offices is they’re all over the map, right? The numbers, the data that you brought up, with high-net-worth, I mean, they’re incredibly under-allocated to alternative investments, right? The thing when I speak with families, ultra-high-net-worth, they’re just all over the map. Anecdotally, I can think of one family office that I talked, to their allocation to alts, in their words, 99%. They’re 99%…
Shifra: There definitely are levels. In the Bain report, if my memory serves me well, the chart, certainly, the ultra-high-net-worth has the highest proportion of them, but it still was, like, 16% or 17% of the space, which, that’s not a huge number, I would say.
Andy: No, no, it isn’t a huge number. But I guess, turning ahead now, getting to this mass-affluent, high-net-worth, and we’ll throw very-high-net-worth in there, you know, your “everyday millionaires,” this is, I think, really where the most, there’s the most headroom. I like that. Can I steal that verbiage, Shifra, the most headroom?
Shifra: Absolutely. Yes.
Andy: Do you think that, you know, asset managers have traction there right now, or are they still trying to find their traction?
Shifra: Yeah, I think they’re, you know, from the folks we’ve been speaking to, they’re still building out their programming, and they’re trying to figure out, okay, which funds do I market? And they’re at various stages, some more ahead than others. So, it’s, to me, it’s still early days.
Andy: So, depending on the asset manager, if I can read between the lines, some of them have traction, you know, depending on how they’re plugged in, what platforms they’re plugged into, or with direct. Some of them are still trying to find that traction.
Shifra: Yeah.
Andy: Do you think they’re gonna find it in the next few years? I mean, let’s talk about, I know you don’t have a crystal ball, but you have a lot of data. You talk with a lot of folks in the industry. Do you think they’re gonna find it?
Shifra: I think they’re getting there. They’re upskilling, in a lot of ways. I know, for instance, you know, I’m having a conversation with one of the CFA societies tomorrow, actually. And CFA historically was an area there. They did some alts. There’s definitely some alternatives on the CFA exams, but Kaya is known as the source for alts. But CFA is now what I would’ve considered mainstream investment space, really trying to upskill all of the CFA members on these topics.
And so, that tells me that we’re looking at a world of ultimately mainstreaming of alternatives. That’s where we do see the industry, and everyone is starting to talk about it. So I do think there’s a first-mover advantage, certainly, for those who get in the space early. And you have to, you gotta market to our iCapital, and to Moonfare, and all these platforms. I mean, I was looking at the Moonfare site. They are really, they only accept 5% of the funds that actually try to get listed on their platform. They go through the scrutiny, the level of review. So, I’m not sure their criteria, but to tick the boxes and really even get access to these communities, it’s a long process.
Andy: So, you know, it’s also expensive, though. I mean, that’s the thing for asset managers, for sponsors. It’s hard enough to put together a good offering, that offers strong value to investors. Then the distribution, it’s like a whole other animal, right? It’s like you need an entirely, you need this second skillset. That’s why I say my own interest at this intersection of marketing, maybe that’s not quite the word, right word, but in finance, it’s like, it doesn’t matter how good your fund is. If you can’t communicate it, and explain why it offers value, and this is whether you are trying to sell it to the Harvard Endowment or to John and Jane lunchpail, you know, accredited investor down the street, you have to communicate its value. And I think, you know, in, like, 2021, it seemed like almost everyone was succeeding with fundraising. And right now, it’s really, it feels like we’re almost winnowing the herd. I hate to say that, but it’s the cycles of capitalism, right?
Shifra: Yeah.
Andy: And are you seeing that in data at Preqin? I mean, are you seeing any smaller asset managers leaving the space, or maybe cutting some product lines, or maybe saying, you know, we’re only gonna focus on this specific asset class, not, you know, these other ones, anything like that?
Shifra: Yeah, I mean, some are, you know, sizing down their shop right now, and they’re trying to find ways to market. And I’ve actually, we’ve heard from several, on the fundraising side, who are looking to even change strategy, and pivot to some of the more in-favor, or move into impact, or ESG. So, really, reading the room, if you will, of what are people interested in. Real assets, infrastructures, trying to pivot into ways… We have some clients who really want to work with us on, they wanna change their strategy. And on our platform, we reflect that data, and they want help making sure that we’re reflecting the strategy appropriately as they move into a new space or new types of mandates, if you will.
Andy: Yeah. That’s really interesting. You know, and the institutional side, it’s one that I’m less familiar with, but you mentioned ESG, and to me that’s where it’s a opportunity for sponsors. Institutions might say, okay, we’re overweight real assets, or we’re overweight alternatives right now, but then we have this other mandate to invest in this sort of ESG asset class or ESG fund. So you can almost, as an asset manager, you’re basically saying you can reverse engineer that and say, “What are the institutionals? What do they need to invest in? Okay, let’s go build that.”
Shifra: Yeah. Exactly. One of the things, we ran a survey, and 65% of the allocators said that ESG is a make-or-break for them. And I would imagine that family offices are no different. If anything, as you.
Andy: Are those, I’m sorry, are those institutional allocators?
Shifra: Yes.
Andy: Okay. Yeah, that makes sense.
Shifra: But I would expect family offices to have a similar mindset, of wanting to, what is a green investment? What is something… You know, I want my money to go towards something that will create maybe some positive impact on the world, on the environment. So, I imagine that that’s gonna be more in favor. And we actually do capture ESG on our platform as well, in the private space.
Andy: Yeah, that’s really interesting. I mean, my experience…I think you’re right. With family offices, huge interest in impact, a hundred percent. I think the breaking point might be ESG itself, even the phrase. Increasingly, I’m finding that is associated with institutional investors with pension funds, with those sorts of investors. And at the retail level, there’s almost, there’s virtually zero interest in ESG per se, like, with that exact verbiage, at the retail level.
But everyone is interested in impact, you know? This is where, I think, between the institutional investment world, capital-raising from institutionals, versus truly private capital, it is a little bit different. There’s a little bit…
Shifra: It’s different.
Andy: Yeah. There’s differences in language, right? Like ESG might be a popular word with institutional investors. I think it’s becoming kind of a poison word sometimes with private capital. And then, you know, also, just not only the verbiage, but just communicating, you know, the value proposition, because, for an institutional investor, they’re gonna be driven by different motivators, different incentives, versus, you know, investors investing their own money. There’s a little bit of a different viewpoint there, right?
Shifra: Most definitely. I mean, you do need to answer to your board. When you look at a CalPERS or a CalSTRS, they definitely, these are things that they’re paying attention to, particularly also diversity, investing in companies that have, you know, more equality. And what I am seeing is it’s also, there’s a generational shift. To be honest, I talk to my kids, they’re very interested in knowing where their money is going, and that it is gonna benefit the environment. The millennial generation really looks at this more, and they’re going to be entering that retail space, so it’s gonna be interesting how that might shift as we look the next 5 to 10 years on the retail side.
Andy: Yeah, absolutely. And we know, in terms of surveys, big shifts with millennials, with Gen Z also, more open to alternative investments. So, I agree as that, you know, these younger generations mature, as they have increasing assets, it is gonna be a landmark, a big shift, in terms of capital-raising, even in terms of just portfolio models. I think younger folks have a little bit of a different mindset. You know, this generation, Gen Z, like, grew up with crypto boom and bust. So it’s just totally different.
Well, I know we don’t have a lot of time left, but Shifra, I’d love to pick your brain, if you could reach into your crystal ball, you know, what are some other trends, you know, given the data that you see, all the folks that you talk to at Preqin, are there any trends that are gonna surprise us in the next couple years across the alternatives landscape, across the fundraising landscape? Is there anything maybe that you see coming that is not as obvious to all of us?
Shifra: It’s not as obvious.
Andy: Yeah.
Shifra: I’ve been looking at a lot of different parts of the data set that we have. So, senior housing is something that, we know the senior population is increasing at a rapid pace, birth rates are going down. And that’s an area, while it’s a small part of the real estate market, immense opportunity, long-term trends there. And there have been numerous studies done on that, and that’s something that isn’t really talked about that much, but it is…
Andy: No. I hear about multifamily, you know, three times a day. I very rarely hear about senior housing.
Shifra: Senior housing. And I could send…I wish I had the chart here to show the population of 70 and up in 2050, but it’s really stark how much it’s increasing, and we’re going to need it. People have…longevity has increased. So, these are some of the long-term trends that we see in the data. Certainly, I mean, ChatGPT, ML, you know, machine learning, we hear that every day. That’s a disruptive force. And the question is, how disruptive is that gonna be? And where do we see that in the future? Is that gonna blow over, like the .com, or are we gonna see some meaningful change there? But from…
Andy: Shifra, are you hearing about that, AI, ChatGPT? Is that buzz from asset managers, or from institutional investors, or from everybody?
Shifra: We’re hearing a lot on the fundraising side. So many deals are coming into the fray, particularly…and just saying “it’s got AI,” or machine learning. I mean, remember back. I’m dating myself with the .com era. If you had .com on your, you know, report, how you defined your company, it was that cool thing that would help define you. So it’s really, we’re seeing an increase there.
And certainly, I’ve tested it, I’ve played with it. I’ve actually asked it what are some of the opportunities in alternatives? And the answer was somewhat stale, right? We know that the data that’s trained in ChatGPT is through, what, 2021. You can’t rely on it solely. But there are opportunities to supplement the work you do with research, but, you know, you have to vet it, for sure.
In terms of other trends and themes, you know, in terms of office, I see some, the pendulum actually swinging back to in-office. I know it’s, might not be the most popular view, but you see the report, the news came out, BlackRock said staff has to come in four days a week. And it seems that more and more companies are recognizing that in-office work is meaningful, bringing staff together. I’m not convinced that office is gone entirely. That’s a Shifra perspective. You know.
Andy: I love it.
Shifra: Yeah. I mean, I think that, and who knows when it’s opportune to go in. But we’ve also seen stories on even family offices looking at U.S. office real estate. And so there are people looking at that. In terms of converting offices to apartments, it’s not as easy as you would think. I’ve been hearing at the NCREIF conference, there was a topic on converting offices into logistics centers, and life science centers, which is really fascinating when you think about what would go into that. You need the massive elevators, and you need, you know, ventilation systems, and massive refrigeration units and all of that if you’re gonna go into life sciences from an office building.
So, there’s a lot of talk of how do you harness these buildings, not leave them as stranded assets. I do believe there’s a market for that, and it’s just a matter of figuring out, okay, what’s the right time to go into those spaces?
Andy: Enterprising sponsors, take note. No, I think those are, Shifra, I do think those are words of wisdom. And I love it when people bring up office, honestly. It brings to mind the Warren Buffett quote, you know, “be fearful when others are greedy and greedy when others are fearful.” And just some of these asset classes that are, like, people hear them, but then their brain is just, like, fast-forward. They’re just like, “I don’t wanna talk about office.” That probably means that there’s a lot of opportunity there right now, actually. If you’re willing to spend time with it, figure it out, take some risk. Obviously, we all get paid to take risk on.
Well, Shifra, thank you so much for sharing your insights. I wanna make sure to link to this report in our show notes. It’s called “Fundraising from Private Wealth: A guide to raising capital,” published by Preqin. Very good report. And that being said, where else can our audience of high-net-worth investors, advisors, and family offices go to learn more about Preqin and all of your information and services?
Shifra: Absolutely. Our URL, www.preqin.com, P-R-E-Q-I-N.com. And we actually have, you can sign up for our “Preqin First Close,” which is free. It’s a daily blog of content about the alternative space, so I highly recommend it. A lot of our research is available on our website free. So definitely take a look at that, and reach out to us if you have any questions.
Andy: Absolutely. And I’m gonna make sure to put that newsletter, that blog on the show notes as well. Shifra, thank you so much for joining the show today.
Shifra: Thank you.
