Institutional Asset Manager Newsletter 04.07.25

Achieving the right mix

Our In My Opinion this week comes from Bravura Solutions’ Matt Pells who examines that most popular of subjects, hybrid funds that blend illiquid private assets with liquid public market securities in a single portfolio.
The rise of all sorts of new investments and investors in private markets was heavily featured last week at the IMPower Fund Forum conference and always with the concern of how private markets can be measured.
Pells writes: “Earlier this month, 17 of the largest DC pension providers signed the Mansion House Compact II, a voluntary agreement to put at least 10 per cent of their default funds into private markets by 2030.
“This will offer a huge boost to the global private markets sector, which is projected to nearly double to USD29.2 trillion in AUM by 2030.”
Pells predicts that liquidity management tools will become the next competitive edge. He writes: “Fund managers will need to rethink how they handle liquidity, data, compliance and reporting across multiple asset classes and regulatory regimes. Over half of respondents to Caceis’s survey said that the current lack of standardised reporting for hybrid funds will create difficulties for institutional investors, for instance.
“The illiquid nature of hybrid portfolios requires additional rigour. That means reconfiguring processes around fund pricing, valuation frequency, redemption protocols, investor communication and market disclosure. Specialist administrators are enhancing their platforms to support hybrid fund needs, from onboarding and fund structuring to data reconciliation and liquidity modelling.”
We try not to bring you too much ETF news but as we know, apart from private markets, ETFs are the flavour of the month. Here is an ETF adjunct launch story as this week saw UniCredit launch a five-year certificate linked to the iShares Bitcoin Trust ETF. The five-year, US Dollar-denominated investment certificate offers 100 per cent capital protection at maturity and is linked to the iShares Bitcoin Trust ETF.
The firm writes that the product provides linear participation in the performance of the ETF, with a maximum return cap set at 85 per cent.
The solution is designed exclusively for UniCredit’s professional and most sophisticated clients, the firm writes, those with a high level of financial expertise, who are interested in accessing alternative investment opportunities, such as cryptocurrencies, within a regulated and capital-protected framework.
“We are seeing increasing interest from professional investors in instruments tied to emerging asset classes such as cryptocurrencies,” says Chicco di Stasi, Head of Group Investment Product Solutions and Head of Equity & Credit Sales and Trading at UniCredit.

Beverly Chandler, Managing Editor, Institutional Asset Manager
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