The Goldman Sachs survey unveiled that despite the global backdrop of economic uncertainty and geopolitical tensions, about 65% of respondents reported improved investment conditions in 2023, compared to a year ago. An additional 22% believe conditions are stabilizing.
According to the survey, despite over-allocation concerns, a higher share of LPs surveyed find themselves under-allocated to alternative investments. This shift suggests that LPs may be willing to explore new avenues even as they grapple with allocation concerns. Nearly 70% of these GPs are trying to gather money from investors or are planning to do so in 2024.
And LPs are said to be looking at track record as the primary factor when evaluating GPs, which would create an uphill battle for newcomers. About 80% of respondents expect a US recession within the next 2 years, with close to 25% seeing it coming by the end of 2023 and close to 55% seeing it coming in 2024.
And about 90% anticipate a recession in EU countries, close to 45% see it by the end of 2023 and a similar percentage see it by 2024. What about interest rates? In the US, close to 50% expect higher rates, while about 45% anticipate rates remaining flat. Globally, the views are said to be reversed, with about 50% expecting flat rates by the end of the year and about 40% expecting higher rates. Sustainability is said to be a focus for about 75% of investors.
Yet, the survey seems to reveal disparities in progress. While close to 45% of GPs report meaningful progress toward sustainable investment goals, only close to 20% of LPs share this sentiment. There’s said to be a growing emphasis on renewable energy investments from about 20% of respondents. And over the next 5 years, AI and data science are expected by close to 35% of respondents to be the greatest drivers of alternative investment evolution.
