Tarun Nagpal, CEO and founder of global alternatives solutions provider S64, discusses the outlook for alternatives and the private markets industry with this news service.
In recent years, investors have piled into alternative investments such as private equity, credit and property amid a low-yield environment, but rising interest rates have created headwinds for these asset classes, a London-based firm has told this news service.
Private equity is a great diversifier in a volatile market, Tarun Nagpal at London-based global alternatives solutions provider S64, highlighted in a recent interview with this news service.
“However, the outlook is more challenging, in view of the higher interest rates,” he said.
Even so, Nagpal sees many opportunities for investors, especially in private credit and infrastructure, which provide stable yields and an inflation hedge. This has also been highlighted by Preqin, the research firm, in its report on The Future of Alternatives In 2027, which predicts that global private capital assets under management will almost double to $18.3 trillion by 2027. See more here.
Nagpal was previously global head of alternatives and multi-asset solutions at Deutsche Bank. When Deutsche Bank cut its alternatives offering, S64 was spun out as a European solutions provider. Another firm that operates as a tech provider of alternative investments is iCapital, which is headquartered in New York and operates internationally.
Nagpal works with asset managers and private banks across private equity, credit infrastructure and impact to develop solutions for private banks and wealth managers in Europe and Asia. Its technology platform offers a lifecycle management of alternative assets, from structuring and onboarding to financing, as well as secondary market capability.
Down on the farm
Highlighting other investment opportunities, Nagpal said he has seen increased demand for agricultural land, which acts as an inflation hedge, especially in regenerative agriculture in Australia.
Regenerative agriculture involves the use of farming and grazing practices which aim to combat climate change by rebuilding soil organic matter and restoring degraded soil biodiversity. Often this doesn't use tillage, resulting in carbon drawdown and improving the water cycle at the same time as enhancing profitability. “Anything that is related to food security and ESG is of high interest to clients,” he said. Nagpal has seen a big increase in demand from clients for renewable energy-focused investments and is currently working on two projects related to that with private banks.
In addition, towards the end of last year, Nagpal launched a new access fund addressing the growing demand of private investors to access sustainable infrastructure projects worldwide. The S64 Access Fund enables private wealth investors to participate in an institutional infrastructure strategy focused on growth and yield with positive environmental and social impact at its core.
Nagpal is a specialist in Long-Term Asset Funds (LTAFs), which are open-ended investment vehicles, as well as European Long-Term Investment Funds (ELTIFs) and semi-liquid evergreen solutions. He is also a specialist in the private markets industry more generally and the uptake in mandates from private banks and wealth businesses to serve high net worth individuals.
(Story originally published on 21 September.)