Bringing you live news and features since 2013
Bringing you news, views and analysis since 2013

21040

BNY Mellon finds private equity most popular with institutional investors

RELATED TOPICS​

A new study from BNY Mellon finds that institutional investors are seeking to allocate more of their capital to alternative strategies, driven by the hunt for strong returns in the current low interest rate environment.

 The report, Split Decisions: Institutional investment in alternative assets, produced by BNY Mellon in association with FT Remark, found that among the various alternative asset classes, private equity is most favoured by institutional clients, accounting for 37 per cent of their exposure, followed by infrastructure (25 per cent), real estate (24 per cent), and hedge funds (14 per cent).
 
According to the study nearly two thirds of investor respondents said that alternatives had delivered returns of at least 12 per cent last year, while more than a quarter said the strategies had earned 15 per cent or more.
 
“Alternatives continue to gain share in portfolios, but institutional investors are becoming more selective about where and how they deploy their capital,” says Frank La Salla, CEO of Alternative Investment Services and Structured Products at BNY Mellon. “As a result, they are demanding greater transparency from their alternative fund managers. This survey reinforces the notion that investors and fund managers alike will need growing levels of support, insight and data to make informed decisions.”
 
Key findings from the report include the fact that 39 per cent of respondents say they will increase their allocations to alternative investment types, while just 6 per cent say they will moderately decrease it. When it comes to private equity investments, 62 per cent of respondents say they will look for lower management fees and 55 per cent say they will request more transparency as they seek to optimize value.
 
Distressed strategies are the most attractive when it comes to hedge fund allocations, with 68 per cent of investors currently having exposure to them and 58 per cent ranking them as one of the three most attractive strategies for the coming 12 months.
 
Fee pressure from investors is leading 78 per cent of hedge fund respondents to say that they will consider reducing their management fees over the next 12 months.
 
Emerging markets, on average, now make up 31 per cent of institutional investors’ alternative allocations. APAC-based investors account for the highest EM share at 54 per cent of their alternative portfolios, followed by investors in EMEA at 29 per cent and the Americas at only 16 per cent.
 
“The continued growth in alternative allocations will be supported by a steady stream of new products and strategies as fund managers cater to increasing amounts of capital headed toward alternative assets,” says Jamie Lewin, managing director and head of manager research at BNY Mellon Investment Management. “Innovation and adaptability will be two key differentiators that determine which firms succeed in capturing what’s become an integral part of institutional portfolios.”
 

Latest News

Global index revenues increased 9.3 per cent in 2023, totalling a record USD5.8 billion, according..
Octopus Investments (Octopus) has announced it has launched a Natural Capital Strategy...
Research firm focused on Alternative UCITS funds, Kepler Absolute Hedge, has published its Market Intelligence..

Related Articles

Trends
The trend to buyout among the UK’s smaller defined benefit (DB) schemes continues with a slew of new sub GBP100 million deals announced this month alone...
The trend to buyout among the UK’s smaller defined benefit (DB) schemes continues with a slew of new sub GBP100..
Different flavours
In what is believed to be the first survey of its kind in the UK market, Nedgroup Investments, the investment-led, multi-boutique global asset manager with over USD20 billion under management, recently undertook a survey with 204 UK investment professionals, seeking insights into their perceptions and attitudes towards boutique asset managers...
In what is believed to be the first survey of its kind in the UK market, Nedgroup Investments, the investment-led,..
UK map
UK local government pension schemes (LGPS) are leading the charge on investment in private markets issuing tenders set to be worth billions of pounds in the coming years...
UK local government pension schemes (LGPS) are leading the charge on investment in private markets issuing tenders set to be..
The trend of private equity firms acquiring businesses in the professional services sector continues with CVC Capital Partners eyeing a possible buyout of EY’s Italian consulting branch...
The trend of private equity firms acquiring businesses in the professional services sector continues with CVC Capital Partners eyeing a..
Subscribe to the Institutional Asset Manager newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by