Institutional investors around the globe are allocating more to alternative assets such as listed real estate, private equity and infrastructure, according to the AMP Capital Institutional Investor Report.
AMP surveyed institutional investors in Asia, the Americas and Europe, collectively managing US$1.9 trillion. The survey revealed a net increase in alternative investment, with the majority of respondents expecting this trend to continue.
European investors were most likely to invest in alternative assets, with 46% of respondents saying they would increase investment in real assets in 2013. This compared with only 18% in Asia, and 28% in the Americas.
Overall, 72% of respondents expressed most interest in real estate, with infrastructure a close second. Commodities were least appealing, attracting 18% of respondents.
Meanwhile, the bond market is keeping its hold on investors, particularly in Europe. Only 9% of European respondents planned to move out of cash or fixed income compared with 23% in the Americas and 27% in Asia.
AMP Capital Chief Executive International and Head of Global Clients Anthony Fasso said that the trend towards alternative assets is likely to continue.
"This suggests that investors are seeing private, direct investments as an attractive source of alternative returns with less volatility than long-term equity and bond investments, despite the often illiquid nature of direct investments such as private equity, infrastructure and direct real estate," he said.
"A rotation out of bonds and into equities has not been widely adopted among global institutional investors. Rather we see them moving out of cash and into both bond and equity investments, and making shifts within their fixed income investments by moving away from sovereign bonds and into high yield corporate debt," Fasso said.
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