Macro concerns, asset allocation, investments, and adoption of environmental, social, and governance (ESG) principles, are the focus of a new study into the attitudes and practices of institutional investors by OFI Global Asset Management and Pensions & Investments.
The survey of 240 institutions represents endowments and foundations, sponsors of corporate and public defined benefit pension plans, and sponsors of defined contribution pension plans and reveals that although institutional investors in general are worried about the same investment issues and have similar financial market outlooks, they are facing a diverse set of challenges.
"This survey is the starting point of what we hope will be an engaging conversation with clients and consultants on how they are structuring investment solutions to meet investment return objectives and manage risk in today's market environment," says Steven Paddon, Head of Institutional & International at OFI Global Asset Management.
The study shows that the current low-yield environment is one of the most pressing concerns of institutional investors, who expect low yields to persist for a decade or more despite the Federal Reserve's rate increase in December 2015. Respondents expressed heightened sensitivity to volatility as well as increasing concern about achieving their long-term return targets, which raises important questions about specific ways in which institutional investors may seek to take on additional risk despite concerns about volatility. The firm will seek to pursue these questions with institutional investors and consultants in one-on-one meetings as well as larger forums on 19 and 21 April, 2016, in Chicago and New York, respectively.
OppenheimerFunds' larger strategy for expanding its capabilities for and engagement with institutional investors is already underway and reflected in numerous initiatives and activities. The organisation has been pursuing more strategic engagement with key institutional consulting firms. In addition, Cynthia Lo Bessette was appointed General Counsel; she joined the firm inMarch 2015 from Jennison Associates, an asset management affiliate of Prudential Financial, to lend institutional experience and knowledge to the firm's senior leadership.
"We were delighted to partner with OFI Global Asset Management to study the strategies that institutional investors are pursuing to meet their goals," says Greg Crawford, Director of Content Solutions at Pensions & Investments. "We hope this report will prompt further dialogue within the institutional investment community."
"This study reveals a natural alignment between what OppenheimerFunds and institutional investors believe is the right way to invest," says Art Steinmetz, Chairman and CEO of OppenheimerFunds. "With more than 50 years of long-term, global investing, our approach across traditional and alternative asset classes puts us in a unique position to serve the evolving needs and challenges of institutions."