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Table of contents
  1. Summary of study findings
  2. Sample Funds
  3. Interview with Anne Breen, Aberdeen Standard Investments
  4. Strategies
  5. Fund terms
  6. Interview with Edmund Craston, PATRIZIA
  7. Management fees
  8. Interview with Austin Mitchell, Nuveen
  9. Management fee step down rates
  10. Carried interest
  11. GP commitment
  12. Redemptions and limits on liquidity
  13. Interview with Matthias Reicherter, Golding Capital
  14. Governance
  15. Interview with Eric Byrne, UBS
  16. Predicted fund trends
  17. Glossary of terms
  18. CMS Funds Market Study 2021 - Webinar materials

Summary of study findings

The study focuses on over 300 private, institutional, alternative, illiquid funds (the “Sample Funds”) on which CMS advised between 2017 – 2020 (the “Review Period”). The Sample Funds cover a range of geographies and asset classes, over 2/3 are focused on European strategies, approximately 1/3 are real estate, 1/3 are private equity (“PE”) and 1/3 are infrastructure, debt and other strategies. Our study has been informed by interviews with leading industry participants and over 100 survey responses (both undertaken at the end of 2020). As Sir Ronald Cohen, the international venture capitalist and PE investor, said “The first bounce of the ball everyone can see. To anticipate the second, you need a really deep understanding of the market.” A lot has happened in the recent past, very little of which was predictable, and what happens next may be even more surprising. We now wonder where the uncertain second bounce of the market will be. We set out below some key findings of the study.

Key findings


  • Overall fund raising volume reduced in 2020 off the highwater mark years of 2017 and 2018;
  • Although 2020 saw fewer funds established, there was a lot of transaction activity as institutional investors continued their programmes and made new allocations in light of the risks, opportunities and challenges that arose out of Covid;
  • In private equity a strong secondaries market continued to develop as institutional investors looked to streamline their holdings and take an active approach to portfolio management;
  • When material uncertainty over commercial real estate values made it necessary to suspend daily dealing in some open-ended property funds, fund managers worked with the regulators to make this happen quickly and safely; we expect further regulation in this area;
  • 2020 saw investors sell off what they perceived to be higher-risk investments and purchase safer investments in perceived Covid winners (principally technology and distribution related assets);
  • Luxembourg continues to be the most popular fund jurisdiction for European fund launches, particularly in light of Brexit, with Dublin also starting to garner additional popularity in relation to funds marketed throughout the EEA;
  • Funds with no commitment from managers are becoming less common with increasing manager commitments in closed-ended funds;
  • A hurdle rate of 8% remains standard for closed ended funds across real estate and private equity;
  • Managers in the upper quartile (in terms of performance) kept their management fees steady but there is some evidence that new managers are offering fee reductions or other incentives in order to raise capital; and
  • The demand for ESG products grows with indications that investors see ESG as a value driver as well as a risk mitigator.
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