Technology and Global Capital Flows Dominate Miami Alts Week 2025

The annual Miami Alts Week (aka Miami Hedge Fund Week), anchored by the prestigious iConnections conference, has emerged as a cornerstone event in the alternative investment industry over the past decade. What began as a boutique gathering has transformed into a must-attend convergence of global investment professionals, bringing together thousands of allocators, investment managers, and service providers from across the world.

This year’s event marked a significant milestone in its evolution, with discussions centered around technological innovation, the growing dominance of private markets, and a notable surge in European allocator participation. The conference’s growth mirrors the expanding alternative investment landscape, with attendance figures reaching record highs and the quality of discourse reflecting the industry’s increasing sophistication and search for capital.

An AI Revolution in Investment Management

The integration of artificial intelligence in investment management has rapidly evolved from a speculative trend to an existential imperative. Throughout the week, industry leaders emphasized that firms must act with unprecedented urgency to remain competitive in an AI-driven future. The transformation extends far beyond incremental efficiency gains, with AI poised to fundamentally disrupt traditional operating models across the entire investment management value chain. Indeed, we believe the days of launching an emerging manager with little more than a spreadsheet and Bloomberg terminal are all but over.

A critical insight that we at Fintova Partners have repeatedly emphasized has been the importance of establishing robust data foundations before pursuing advanced AI initiatives. Firms must first develop comprehensive data strategies, implement a modern data architecture, and ensure stringent information security protocols. These elements are applicable to all asset classes and strategies and serve as critical prerequisites for successfully deploying AI across investment decision-making, execution, risk management, operations, and client service functions.

The urgency of this transformation is underscored by startling industry projections that have recently been shared across multiple channels. According to a Citi analysis, the global banking sector could see over 50% job displacement as AI assumes an increasingly dominant position in the workforce. Bloomberg estimates suggest nearly 200,000 banking jobs could be eliminated in the next 3-5 years alone. This dramatic shift is forcing firms to reevaluate their entire operational structures, digital competencies, and talent strategies.

Blockchain: Beyond Cryptocurrency

A notable shift in blockchain discussions also marked this year’s conference. Moving beyond cryptocurrency speculation, the focus has turned to blockchain’s practical applications in traditional finance, particularly in the tokenization of real-world assets. This evolution represents a mature approach to distributed ledger technology, with emphasis on its potential to enhance market efficiency and accessibility.

The adoption of blockchain technology, coupled with the widespread use of stablecoins, is already opening new avenues for global fund distribution, though it remains early days. A new crypto-friendly US administration and Congress are actively pursuing regulatory and reserve frameworks that will continue to normalize the use of digital assets. Perhaps most significantly, these developments are creating opportunities to serve previously underbanked populations, potentially democratizing access to sophisticated investment products that were historically reserved for institutional investors.

A Surge in European Allocators

One of the most striking developments this year was the unprecedented presence of European allocators. According to iConnections data, nearly one-third of attending allocators hailed from the European Union, marking a significant shift in trans-Atlantic investment flows. This trend was highlighted during a well-attended breakfast briefing hosted by Fintova Partners and Quayside Fund Management.

The surge in European interest comes at a crucial time, particularly given recent regulatory changes affecting UK pension funds. These landmark changes, announced on January 28, 2025, are set to unlock an estimated £160 billion in UK pension fund surpluses that had been “trapped” by outdated regulations from 2016. This will allow defined benefit schemes to extract and redeploy capital more flexibly through trustee-employer agreements, marking a fundamental change in how pension funds can deploy capital to boost economic growth. The changes have therefore created what can only be described as a tsunami of untapped capital seeking new investment opportunities, especially in alternative assets.

The compressed timeframe for deploying this capital adds urgency to the situation, creating both opportunities and challenges for investment managers. The risk is that capital will be disproportionately allocated to a few large managers as the path of least resistance. This weighs not only on smaller managers, but also on investors who don’t benefit from diversification and specialization.

Automation will absolutely be critical for all managers to handle these flows at scale, requiring a strong technology and data foundation. For some managers, there are still considerable gaps with these capabilities and it is exactly an area in which we at Fintova Partners have dedicated ourselves.

Private Markets’ Continued Ascendance

The conference also highlighted the remarkable growth trajectory of private market assets under management, which is outpacing public markets by nearly two-to-one. This acceleration in private markets, particularly in private credit, private equity, and real estate is driven by several compelling factors.

First, persistent inflation and market volatility have pushed institutional investors to seek uncorrelated returns and inflation protection through private market investments. Private credit, in particular, has benefited from the retrenchment of traditional banking institutions, creating opportunities for alternative lenders to fill the financing gap while capturing attractive risk-adjusted returns.

Second, private equity continues to attract capital due to its ability to create value through operational improvements and strategic repositioning, particularly during periods of market stress. The longer investment horizons and direct control offered by private equity enable managers to weather short-term market volatility while focusing on long-term value creation.

Third, traditional asset managers are experiencing unprecedented pressure from the relentless rise of passive investment products, escalating regulatory compliance costs, and the increasing sophistication of institutional investors. The result is an increasingly commoditized landscape of products, particularly within the public markets, and continued margin compression for many managers.

Additionally, the growth of private markets reflects a broader structural shift in capital formation, with companies staying private longer and accessing capital through private markets rather than traditional public offerings. This trend has created a larger universe of private market opportunities, allowing investors to participate in companies’ growth trajectories earlier and potentially capture greater value appreciation.

Smart investors are also using this opportunity to mentor and nurture early-stage portfolio companies, and in the best cases providing them with access to infrastructure, shared services, and subject matter experts that they would not otherwise have. We believe this represents a growth opportunity for GPs, too, as these services become integral to a portfolio company’s operations, potentially leading to a longer tail of income that survives beyond an eventual liquidity event.

This growth, however, brings new challenges, particularly in the realm of data management and analysis. Success in private markets increasingly depends on managers’ ability to leverage data-driven approaches across their operations, from investment research to risk management and client reporting. The historically subjective and relationship-driven nature of private markets will continue to give way to more systematic, and data-driven decision-making processes. For now, we believe this to be a significant differentiator, though it will eventually become a parity play as these methodologies, including the use of AI, become increasingly existential.

Looking Ahead

Miami Alts Week 2025 revealed an industry at an inflection point, where technological innovation, shifting capital flows, and evolving market structures are creating new opportunities and challenges. The growing interest from European allocators, combined with the transformative potential of AI and blockchain technology, suggests that the alternative investment industry is entering a new phase of growth and evolution. Indeed, we truly are in the midst of the next Industrial Revolution.

The imperative for firms to act decisively in response to technological disruption cannot be overstated. With AI poised to reshape the workforce and redefine operational models, investment managers must move quickly to build the necessary technological capabilities while ensuring they maintain the human expertise and judgment that remains critical to investment success.

As the alternative investment industry continues to evolve, the role of Miami Alts Week as a forum for discussion, networking, and capital formation becomes increasingly vital. The conversations and connections made during this year’s conference are a good sample of the industry’s current direction, particularly in the areas of technological adoption, international capital flows, and the continued growth of private markets.

In light of these dramatic changes, we believe managers should be looking at next-generation operating and client-engagement models that reflect the capabilities offered by AI. We also believe that managers are best positioned to focus on their core competencies, rather than to pursue a fully vertically integrated stack, either organically or through acquisition. In our view, partnerships will therefore be increasingly critical, creating a network effect across portfolio management, distribution, and service providers.