Displaying items by tag: alternatives

According to a recent survey released by professional services firm Ernst & Young, institutional investors are showing more confidence in alternative assets. The 2022 EY Global Alternative Fund Survey revealed that approximately 75% of institutional investors felt their alternative asset managers "met or exceeded performance expectations during a challenging and volatile market period, successfully protecting capital in down markets while positioning for long-term income generation." Private equity received the best feedback with 50% of institutional investors citing the outperformance of expectations of this asset class. This was followed by real estate strategies at 45% and real assets/infrastructure at 38%. While the majority of investors expected to keep their alternative asset allocations constant, investors that are expecting to make changes stated that "they will increase their allocations in the next three years." The survey also found that in response to rising demand, alternative fund managers are increasing their product offerings in areas such as illiquid credit, real estate, private equity, venture capital, and opportunistic or special situations.

Finsum:Based on the results of a recent Ernst & Young survey, institutional investors are showing more confidence in alternative strategies such as private equity and real estate. 

During a recent briefing, Blackstone's private wealth management solutions group explained that private equity and other alternatives have been well suited to perform during volatile times when traditional stocks and bonds have fallen. This has been certainly true this year as equities, government bonds, and most corporate debt have fallen as inflation and interest rates rise and recessionary concerns persist. Private markets and hedge fund strategies, on the other hand, have fared much better. However, the firm also believes that affluent investors are still under-allocated in alternative investments. According to the firm, affluent private investors typically only allocate about 5% to alternative investments. Joan Solotar, Global Head of Private Wealth Solutions at Blackstone told journalists at a briefing in London that “Investors remain under-allocated. Many advisors have found that if they hadn’t allocated to alternatives, then they underperformed. Some advisors, such as those working for decades without ever having broached the alternatives space, might lack the confidence to take the plunge.” Her colleague, Rashmi Madan, Head of EMEA for Private Wealth Solutions said the reason for this is due to a combination of burdensome administrative tasks and the difficulties investors have had accessing drawdown funds.

Finsum:Blackstone stated during a recent briefing that alternatives perform well in volatile markets when traditional securities falter, but affluent investors are still under-allocated.

F.L.Putnam Investment Management Company recently announced the launch of a new platform that will allow advisors to execute direct investments in alternatives. The platform is designed for registered investment advisors and features proprietary investment manager research on a curated list of hedge funds, private equity, private real estate, private credit, and venture capital from Atrato, F.L.Putnam's consulting practice. Advisors will be able to access the research with +SUBSCRIBE, an alternative investment order management system for non-traditional product transactions. Through +SUBSCRIBE, RIAs will be able to review Atrato's manager due diligence, the manager's data room of fund materials, and execute transactions into a tailored menu of alternative investments. Tom Manning, CEO of F.L.Putnam had this to say about the launch, "As RIAs grow and scale, the need for sophisticated investment advice, tools, and capabilities increases exponentially. With our platform, advisors will have access to a fully customizable, state-of-the-art solution that allows them to research and confidently allocate to alternative investments on behalf of their clients."

Finsum:RIAs can now access manager research and execute direct investments in alternative assets through F.L.Putnam’s new investment platform.

According to a recent survey by Broadridge Financial Solutions, 67% of financial advisers are using alternative investments such as real estate investment trusts and private funds, compared to 59% in a previous survey taken earlier in the year. Of the 400 advisors surveyed by Broadridge, more than half said they plan to increase the use of alternatives over the next two years over traditional assets such as stocks and bonds. However, the advisers also noted their disappointment in the available offerings, with just 27% saying they are very satisfied with the options available from asset managers. Among the issues leading to this disappointment are too few choices, too much paperwork, and compliance and regulatory concerns. As per the reason for the increased interest in alternatives, advisers cited diversification, followed by non-correlation with equities. According to the survey, the alternatives that advisors were most interested in were REITs, commodities, private equity, hedge funds, and private debt.

Finsum: With investors concerned over steep portfolio losses, advisors are showing an increased interest in alternatives such as REITs, commodities, private equity, hedge funds, and private debt.

According to a Bank of America Private Bank study, younger, wealthy investors are turning to alternative investments. Bank of America polled 1,052 high-net-worth investors with at least $3 million in investable assets from May to June 2022. The study revealed that 75% of high-net-worth investors between the ages of 21 and 42 don’t expect above-average returns from traditional stocks and bonds, with 80% of these young investors flocking to alternative investments. In fact, younger investors are allocating three times more to alternative assets and half as much to stocks than other generations. Alternative investments can include hedge funds, private equity, real estate, commodities, and structured products. The move to alternatives has most likely been triggered by concerns over losses in the stock and bond markets. There has also been an increase in advisors turning to alternative investments, according to a survey from Cerulli Associates. Based on that study, the top reasons for increased alternative allocations include reducing exposure to public markets, volatility dampening, and downside risk protection.

Finsum: Both young, wealthy investors and advisors are turning to alternative investments due to stock and bond losses and the need for downside protection.