Preqin: Institutional Investors To Up Alts. Allocations

May 23 2013 | 11:36am ET

Institutional investors remain bullish on alternatives, according to the latest data from Preqin, with most planning to maintain or increase their allocations to hedge funds, private equity, real estate and infrastructure in 2013.

Preqin's global survey of 70 institutional investors found the majority to be happy with its investments in each alternative asset class—particularly real estate investors, 93% of whom plan on maintaining or upping their allocations this year.

The 2013 Preqin Investor Network Global Alternatives Report found that among private equity investors, 59% will maintain their level of  exposure throughout 2013, with an additional 27% increasing their allocations to the asset class.

A third of investors in hedge funds plan to increase their exposure to the asset class, while a fifth plan on decreasing their allocations throughout 2013.

The survey said 50% of the institutional investors polled will actively seek investment opportunities through dedicated investment employees. Another 31% will adopt some mix of proactive and passive approaches to alternative portfolio building.

Two-thirds (67%) have two or more investment-focused employees dedicated to alternative assets.

“Although the benefits of investing in each alternative asset class vary, it is clear that most investors want to keep a notable allocation to alternative assets going forward, with many looking to increase their exposure,” said Preqin's Stuart Taylor in a statement. “Furthermore, many investors are becoming more sophisticated with how they access alternative assets, with most proactive in sourcing new investment opportunities. One of the main challenges that investors still face, however, is identifying the most appropriate funds that are in the market to make commitments to.”


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