More than a third (34 per cent) of global institutional investors invest in four or more alternative asset classes, according to a new report by data and intelligence company Preqin Ltd.
This represents a significant increase over the past 12 months as only a quarter of respondents invested in at least four alternative asset classes a year ago.
“It is notable that, although the proportion of investors that are not involved in the alternatives industry has remained relatively consistent, those with exposure are now expanding and diversifying their exposure to different asset classes,” said Andrew Moylan, head of real estate products at Preqin, in a news release.
According to the survey, investor satisfaction with the private equity asset class is at record levels, with 84 per cent of respondents holding a positive perception of private equity and just three per cent viewing it negatively. About two-thirds (62 per cent) of respondents plan to increase their allocation to private debt over the longer term, while 53 per cent intend to do the same with infrastructure.
Read: Institutional investors favouring allocations in less liquid assets
“This has been driven by sustained investor appetite, in part due to these asset classes’ ability to outperform public markets over the long term,” said Moyland, referring to the increased interest in private debt and unlisted infrastructure. “. . . There is a high level of satisfaction across the alternative assets industry, and it seems as though investor demand for alternatives will continue to grow and become more sophisticated in the near future.”
The survey also found a strong majority (93 per cent) of global institutional investors felt their real estate portfolio’s performance either met or exceeded expectations in 2016, but more than a third (37 per cent) expect their portfolio will perform worse in the coming year.
Read: What should institutional investors expect from the real estate market in 2017?
More than a fifth (22 per cent) of respondents believe it’s now easier to identify attractive natural resources investment opportunities than a year ago, a far higher proportion than any other asset class.