More than 80 per cent of institutional investors surveyed at a recent event hosted by Northern Trust in Stockholm expect investor allocations to alternative assets to increase within the next five years, with private equity and infrastructure to receive the highest new allocations.
Approximately 50 Nordic institutional investors – including some of the largest and most sophisticated asset owners in the world – were surveyed on their perspectives on the evolving role of alternative investments.
“In the current low growth, low interest rate environment, alternative investments play an increasingly important role for investors looking for higher yield and lower volatility,” says Paul Cutts, head of Alternative Investment Services for Northern Trust Global Fund Services across Europe, Middle East and Africa (EMEA). “This survey confirms that institutional investors are expecting to allocate more to alternative investment funds over the next five years.”
Respondents also expect an increased focus on environmental, social, and governance (ESG) factors within the investment process over the next five years. Nearly 50 percent believe that it will be of significant importance and more than a quarter of respondents (26 per cent) stated that ESG credentials could “make or break” a deal.
“ESG considerations are naturally linked to infrastructure investments,” says Mamadou-Abou Sarr, global head of ESG investing at Northern Trust Asset Management “At Northern Trust we recognise the importance of ESG and have more than 25 years of experience managing socially responsible portfolios. As of Q1 2016, we manage approximately USD57.9 billion in responsible investment portfolios, helping investors to automate and simplify the oversight process.”
Northern Trust provides a full range of services for both asset managers and asset owners – including back and middle office services, as well as investment solutions.
For alternative investments, Northern Trust can support managed account solutions, providing daily hedge fund transparency with investment and portfolio-level risk and compliance.
In April 2016, Northern Trust and ALTX announced they had entered into an exclusive agreement to offer Northern Trust’s global institutional clients access to the largest ever amount of structured and unstructured data for hedge funds, on one platform.
As at 31 December 2015, Northern Trust had approximately USD450 billion in alternative assets under administration on behalf of asset managers and approximately USD531 billion in alternative assets for institutional investors, globally.
