More than half (56 per cent) of institutional investors say they plan to increase their allocation to alternative investments allocation over the next 12 months, up slightly from 55 per cent in 2022, according to a new survey by research firm Dynamo Software Inc.
The survey, which polled more than 100 global respondents, found among respondents that plan to increase their investments in alternatives, the vast majority (86 per cent) said they plan to do so through a fund manager, while nearly two-thirds (61 per cent) cited co-investment, followed by direct investment (46 per cent), secondaries (36 per cent) and derivatives (15 per cent).
Notably, just three per cent of institutional investors said they plan to invest in cryptocurrencies, down from 13 per cent the previous year.
When asked about what areas they’d like to see their technology fund managers focus on, more than two-fifths (44 per cent) cited generative artificial intelligence as their first choice, followed by edge computing and native clouds (29 per cent) and automation/hyperautomation (23 per cent).
Nearly half (47 per cent) of respondents said they use risk factor models for their total portfolio, while significantly fewer said they don’t use these models for any asset class (18 per cent) or just for public (17 per cent) or some (17 per cent) asset classes.