Institutional investors are planning increased allocations to real assets over the next 12 months due to the lasting impact of Covid-19 on world economies, including the working-from-home trend, research has suggested.
Nearly half of insurers and 37% of pension funds globally say they expect to increase investment in real asset strategies amidst ongoing uncertainty, according to the study by Aviva Investors.
‘Real estate long income’ was identified as the preferred asset class by over 50% of insurers and 45% of pension funds, while debt strategies were also favoured highly.
The report also highlighted the increased efforts of investors to align their portfolios with net-zero emissions targets. Nearly 60% of insurers and 48% of pension funds are looking towards “energy-efficient real estate assets”, the report found.
Meanwhile, the acceleration of the working from home trend by the pandemic is expected by many institutions to provide the “greatest opportunity” for real assets investing over the long-term.
Mark Versey, chief investment officer of Aviva Investors’ real assets division, said: “Whilst Covid-19 clearly had an immediate and profound impact on the built environment, many investors have seen these changes as the acceleration of existing structural shifts.
“Investors are seeking out opportunities caused by these changes, such as the increased reliance on digital infrastructure from those working remotely and the growing importance of logistics assets as demand for ecommerce expands,” he added.
A thousand decision-makers at insurers and pension funds representing over €2 trillion assets took part in the report.
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