Alternatives allocations will continue to increase, MPG research states
11 April 2023 Cayman Islands
Image: tadamichi/stock.adobe.com
97 per cent of portfolios managed by professional investors have increased their allocations to alternatives in the past year, research from international asset manager Managing Partners Group (MPG) has found. This trend is expected to continue over the next 12 months.
MPG’s survey, conducted in March 2023, included 100 wealth managers and institutional investors. Based across Switzerland, Germany, Italy, the UK and the US, participants collectively hold £258 billion in assets under management.
96 per cent of those polled have become more positive about alternatives over the last two years, the study found, with 33 per cent stating that they are now “much more positive” and only one per cent becoming “more negative”.
This change in attitude is due to greater transparency in alternatives reporting, an improved track record of returns, an increase in the number of alternative funds and investment strategies available, and innovation in the alternative asset management space, participants reported.
More than half of those surveyed stated that the main benefits of investing in alternatives are attractive yields and hedging against inflation. 42 per cent cited strong valuations growth, 21 per cent diversification benefits and 10 per cent lower volatility.
On its part, through MPG’s High Protection Fund the company has seen an increase of life settlements demands in the alternatives space. Life settlements are a US-issued life insurance policy sold by the original owner at a discount to their future maturity value.
Jeremy Leach, CEO of MPG, says: “Our research shows that attitudes towards alternatives among professional investors have changed significantly in recent years, due to a number of contributing factors. The alternatives sector is growing rapidly, with assets under management expected to expand to $23.2 trillion by 2026, showing its strength in times of high inflation and offering attractive yields.”
MPG’s survey, conducted in March 2023, included 100 wealth managers and institutional investors. Based across Switzerland, Germany, Italy, the UK and the US, participants collectively hold £258 billion in assets under management.
96 per cent of those polled have become more positive about alternatives over the last two years, the study found, with 33 per cent stating that they are now “much more positive” and only one per cent becoming “more negative”.
This change in attitude is due to greater transparency in alternatives reporting, an improved track record of returns, an increase in the number of alternative funds and investment strategies available, and innovation in the alternative asset management space, participants reported.
More than half of those surveyed stated that the main benefits of investing in alternatives are attractive yields and hedging against inflation. 42 per cent cited strong valuations growth, 21 per cent diversification benefits and 10 per cent lower volatility.
On its part, through MPG’s High Protection Fund the company has seen an increase of life settlements demands in the alternatives space. Life settlements are a US-issued life insurance policy sold by the original owner at a discount to their future maturity value.
Jeremy Leach, CEO of MPG, says: “Our research shows that attitudes towards alternatives among professional investors have changed significantly in recent years, due to a number of contributing factors. The alternatives sector is growing rapidly, with assets under management expected to expand to $23.2 trillion by 2026, showing its strength in times of high inflation and offering attractive yields.”
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