Alternative fund managers are not experiencing the same liquidity crunch as they did during the global financial crisis (GFC) in 2008, and many now have an additional tool to protect investment funds from potential mass redemptions due to the increased prevalence of  the investor-level gating mechanism over the past decade.

COVID-19 has impacted the most basic actions associated with investing in the alternatives sector: namely, if managers do not update their technology capabilities, they will have to physically print, sign, scan and email subscription forms, redemption requests and other fund documents while working from home (“WFH”).

In Private Equity International's Fund Administration Special, Nikolaos Perros (Head of Private Equity, Citco Fund Services (USA) Inc.), discusses the future of private equity outsourcing and how Covid-19 has forced the industry to move forward to a new digital age in online collaboration.

A range of pressures since the onset of COVID-19 are predicted to compel fund managers to diversify away from treasuries, money market funds and traditional banks towards ultra-liquid banks for holding unencumbered cash balances.