Institutional Investors To Beef Up Alternatives Teams

Aug 20 2014 | 11:08am ET

Over a quarter (28%) of the institutional investors polled by data provider Preqin plan to increase the size of their alternative asset teams over the next two years.

None of the investors polled intends to cut the size of its team sourcing private equity, hedge fund, real estate and infrastructure opportunities and over the past two years, 30% have added to those teams.

Over 35% of investors in each of the four alternative asset classes plan to increase their allocations over the longer term.

A full 41% of private equity investors use internal investment teams compared to 27% of hedge fund investors, 25% of real estate investors and 14% of infrastructure investors.

At least a third of investors in each individual alternative asset class feel positively about those assets at present, with private equity investors expressing the most confidence (51%).

Hedge fund investors are least satisfied with their investments over the past 12 months—27% feel their investments have fallen short of expectations.

On the other hand, one third of real estate investors feel their investments have exceeded expectations, as do 14% of infrastructure investors, 12% of p.e. investors and 9% of hedge fund investors.

“Institutional investors around the world are generally very positive about their investments in alternative assets at the moment,” said Preqin's Andrew Moylan in a statement. “Although hedge funds have not had the best start to 2014 in terms of returns, all four main alternative asset classes are generating solid performance figures over longer investment horizons, and as a result investors are mostly satisfied with their portfolios.

“Many investors have indicated to Preqin in our most recent survey that they intend to increase their allocations to alternative assets and make greater level of commitments over the next year. As a result, many investors have recently grown their dedicated investment team to source new opportunities, and a number also intend to grow their teams over the next few years.”

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