Global investment risk appetite is increasing as we head into 2024. The insight comes from Ocorian, the specialist global provider of market leading solutions to financial institutions, asset managers, corporates and high net worth individuals, which has produced a 2024 outlook report.
The report* analyses the key findings from 301 respondents, all of whom are in senior positions across the world, including in the Channel Islands. Respondents detailed their concerns, aspirations and strategies that they deem will shape the financial landscape for years to come.
57%, nearly six out of 10 respondents to Ocorian’s survey, predict that their organisation’s appetite for investment risk will increase dramatically over the next 12 months. This could benefit the Channel Islands’ financial services industries, with inflation rates due to fall during this period, driving economic growth and giving clients the confidence to increase their exposure to riskier investments that could yield higher returns.
The reasons for the increase stem from a communal belief that deal pricing will turn more favourable, with 67% highlighting this as a top reason for their increased risk appetite. Expectations of lower inflation and interest rates also contribute significantly to this optimistic outlook.
However, there are still concerns surrounding this topic. Political uncertainty on a global scale is a predominant worry for 54% of firms expecting a dip in risk appetite.
Paul Spendiff, Head of Business Development – Fund Services at Ocorian, said: “Investment risk appetite is evidently increasing with senior executives and major investors expecting a shift in interest rates as well as more opportunities for acquisitions at more attractive prices.
“The optimism about the year ahead is strengthened by a focus on risk management. Companies have and continue to invest in new technology and enhance employee incentive schemes for 2024, as evidenced by 75% of Channel Islands respondents in the study.
“We are seeing a growing demand for our services as we help our clients solve these difficult issues in the years to come. Aside from this, there are major concerns about the year ahead, ranging from stubbornly high inflation to the threat of global recession.”
The other key themes discussed in the survey cover regulation and compliance outlook, market/sector activity and outsourcing.
*In November 2023, Ocorian commissioned independent research company PureProfile to conduct a global study of 301 senior executives. The survey was carried out among board directors at companies with annual turnover of more than $250 million, fund managers working in family offices, private equity, venture capital and real estate; and senior executives working in capital markets focused on structured credit, CLOs, securitisation, mortgage-backed securities and asset- backed securities. Respondents to the survey, which was conducted in November 2023, were based in the UK, continental Europe, Asia, the Middle East and North America and included 150 alternative fund managers, 50 family office investment managers, and 50 senior capital markets executives.