There is a “huge appetite” for exposure to the energy transition market among institutional investors, suggests a recently published study.
The fourth annual EQuilibirum Global Institutional Investor survey produced by asset manager Nuveen found that the majority (55%) of investors believe they can “significantly influence the progress of energy transition” through their investments.
Two areas – alternative energy and infrastructure – top the list.
“Investors clearly understand their influence and see government policy and technical innovation as the biggest tailwinds for investments in the energy transition for the year ahead,” said Mike Perry, head of Nuveen’s global client group.
The report also found that the same percentage of investors plan to increase their exposure to private alternatives with private equity and private credit proving to be the leading choices.
The third finding from the survey was an increase in allocations to investment-grade fixed income, as cited by 48% of respondents. Meanwhile, 40% of investors plan to reduce their allocations to equities.
According to Nuveen, the findings show that many investors are “significantly reformulating their approach to risk management and asset allocation as a result of geopolitical tensions and higher interest rates as well as ongoing market volatility which is only likely to increase due to the number of general elections set to take place in 2024.
The survey canvassed 800 global institutional investors.
