Global investment in alternatives nosedived during Q1 2020, with fundraising and deal flow stumbling amid the Covid-19 pandemic.
Asia has been worst hit, where aggregate deal value dropped by 80% compared with the previous quarter, according to research conducted by Preqin.
There have been “clear signs of contraction” in the alternatives market, with fundraising down 30% globally in Q1, the lowest levels seen since Q1 2018.
Alternatives fundraising in Asia tumbled by 66%, marking the worst quarter of fundraising seen in seven years.
Fundraising in Europe was down by 48% during the same period. Elliot Bradbrook, head of research and data operations at Preqin, predicted less fundraising will happen in Q2, which will be “even more challenging as the pandemic continues to move west”.
Investors have “also become more wary”, Bradbrook said, as 60% of investors surveyed by Preqin are planning to scale back the capital they were expecting to deploy this year.
Ben Lamping, director of global alternative product management at Nuveen, said that while the market is still in the “first phase of gathering and digesting market data”, investors are starting to “impose higher standards of transparency” from fund managers.
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