Alternative investment strategies growing in popularity among institutional investors: report

Alternative investment strategies growing in popularity among institutional investors: report

Real estate is a popular exposure, but lags behind in performance satisfaction.

new report from CIBC Mellon finds Canadian institutional investors are looking to increase their overall allocations to alternative investment strategies.

The report, published on Monday, revealed that 58% of investors surveyed said they expect their allocations to alternatives to increase within the next year.

Real estate was the most popular alternative investment, with 42% of respondents calling it their favoured sub-asset class. However, while real estate accounted for Canadian investors’ largest alternative exposure, it also had the lowest levels of performance satisfaction. Only 12% of respondents said it performed ahead of expectations, and 30% said it performed worse than expected.

Other popular sub-asset classes included infrastructure (20%), private equity (18.7%), private debt/loans (17.9%) and hedge fund investments (1.4%). Investors were most satisfied with private equity, with 47% saying it exceeded expectations and the remainder saying it met expectations.

The most significant trends investors predicted over the coming year were lower fees to investment managers (30%), increased transparency through technological innovation (28%) and a higher focus on environmental, social and corporate governance (ESG) investing (22%).

Read the full report here.

Source: Investment Executive

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