Increased risk appetite forecast for new year

Monday 18 December 2023

Ocorian says 57% of organisations its surveyed have said they've got an increased appetite for investment risk in 2024.

The global provider of solutions to financial institutions, asset managers, corporates and high net worth individuals has produced a 2024 outlook report.

The report analyses the key findings from 301 respondents, all of whom are in senior positions across the world, including in the Channel Islands.

Nearly six out of 10 respondents predicted that their organisation’s appetite for investment risk will increase dramatically over the next 12 months. Ocorian said this could benefit the Channel Islands’ financial services industries, with inflation rates due to fall during this period, driving economic growth and giving clients the confidence to increase their exposure to riskier investments that could yield higher returns.

The reasons for the increase stem from a communal belief that deal pricing will turn more favourable, with 67% highlighting this as a top reason for their increased risk appetite. Expectations of lower inflation and interest rates also contribute significantly to this optimistic outlook.

However, Paul Spendiff, Head of Business Development – Fund Services at Ocorian, said there are still concerns surrounding this topic. 

“Investment risk appetite is evidently increasing with senior executives and major investors expecting a shift in interest rates as well as more opportunities for acquisitions at more attractive prices.  

“The optimism about the year ahead is strengthened by a focus on risk management. Companies have and continue to invest in new technology and enhance employee incentive schemes for 2024, as evidenced by 75% of Channel Islands respondents in the study. 

“We are seeing a growing demand for our services as we help our clients solve these difficult issues in the years to come. Aside from this, there are major concerns about the year ahead, ranging from stubbornly high inflation to the threat of global recession.”

Pictured top: Paul Spendiff, Head of Business Development – Fund Services at Ocorian.