Altegris Survey Finds Investors Are Bullish On Alternatives

Jun 23 2015 | 12:59pm ET

A significant majority of high net worth and institutional investors plan to increase their allocation to alternative funds in 2015, according to a survey conducted by Altegris Advisors.

Findings of the Altegris Investor Survey, conducted at the Strategic Investment Conference, hosted by Altegris and Mauldin Economics, revealed that 66% of respondents plan to increase their allocation to alternatives during the second half of 2015 - of which managed futures/global macro (32%) and private equity (28%) ranked as the top asset classes for increasing.

Registered Investment Advisers (45%) and Private Investors (31%) put managed futures/global macro at the top of their list, while Institutions (36%) put Private Equity at the top. More than half of respondents (59%) said that alternative allocations should represent 10% to 25% of a diversified portfolio, while 15% thought the number should be between 25% and 50%. Only 23% believe the allocation should be less than 10%.

"Our annual Strategic Investment Conference opens a dialogue of global markets, economics, and technology discussions to a group of sophisticated investors over the course of three days," said Jack Rivkin, CEO and CIO of Altegris Advisors. "The findings of the Altegris Investment Survey represents a key indication of the role various alternative classes are increasingly playing in portfolios."

When asked how investors are using alternatives in their portfolios, an overwhelming majority of respondents (63%) noted they use alternatives to complement traditional strategies, 17% use alternatives as a substitute for traditional stock strategies, and 15% use alternatives to hedge against volatility in the market.

Of particular interest, 60% of respondents indicated that clarity regarding investment philosophy/strategy is the most important attribute to choosing an alternative fund.  Only 19% selected historical returns as most important, 24% indicated that lack of clarity regarding investment philosophy/strategy was a major concern regarding investing in alternatives, and 53% expressed concerns about fees.

"While investors are beginning to see the value of alternatives in a portfolio, the industry still has work to do to ensure that clients understand the role and net return characteristics of specific alternative strategies," said Matt Osborne, Co-President, Head of Marketing and Business Development at Altegris Advisors. "This is particularly the case as more alternative strategies, such as private equity, become available to a wider audience of qualified investors."  

The Altegris Investor Survey was conducted at the 2015 Strategic Investment Conference which took place April 29 to May 2 in San Diego. Respondents were event attendees described as private investors, institutional investors, registered investment advisors, hedge fund managers, bank/wirehouse advisors and independent broker/dealer advisors. The data is based on responses from 124 random respondents of the 649 attendees.

The Altegris companies include Altegris Investments, Altegris Advisors, and Altegris Clearing Solutions. As of March 31, 2015, Altegris had $2.65 billion in client assets.

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