Asset managers now manage a record €7 trillion in alternative assets, although institutions are sharply divided in their attitudes towards individual asset classes, a report has found.
The Preqin Investor Outlook for the first half (H1) of 2016 finds institutional investors are keenest on private equity as an asset class, with 65% holding a positive perception, and 6% a negative one. However, 38% view hedge funds unfavourably, compared to 32% who don’t, and 33% view natural resources negatively compared to 17% who don’t.
Irrespective of how alternative assets are perceived, 79% of institutional investors now invest in alternative assets, with 42% investing in three or more. However, only 5% currently invest in every asset class. Real estate is the most popular, with 66% currently allocated, up from 59% at the start of H2 2015.
The findings suggest a majority of institutional investors intend to increase their allocations to all asset classes in the long-term, although 23% intend to reduce their exposure to natural resources investors, and 26% intend to reduce their investments in hedge funds.
Preqin surveyed over 150 institutional investors to compile the report.
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