Blackrock: Investors Warming To Real Assets

Dec 18 2014 | 11:42am ET

Institutional investors are taking a shine to real assets, according to new research from Blackrock.

The firm surveyed 201 executives—80 located in North America; 80 in Europe, the Middle East and Africa; and 41 in Asia-Pacific—on their attitudes and allocations to real assets. Approximately one-third of the organizations represented in the survey have assets under management of more than $75 billion, with a similar proportion reporting between $1 billion and $5 billion.

The survey found 46% of respondents had increased allocations to real estate, infrastructure, commodities, timber and farmland in the past three years while 60% expect to do so in the next 18 months.

Nearly half (47%) of respondents cited low interest rates as having an influence on their real-asset investments and 62% said they would re-think some of their allocations in the event of a “significant” rise in rates. Sensitivity to interest rates varied by sector: 59% of respondents felt real estate investments would be most affected by rising rates, compared to 41% for infrastructure and 33% for commodities.

Inflation protection was another of the main the reasons investors owned real assets. Of the respondents who are increasing investment in infrastructure, 29% cite inflation protection as their motivation.

Here are some of investors' thoughts on real assets as presented in Blackrock's survey.

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