Institutional investors will be targeting alternative investments over the next two years, with infrastructure assets generating the greatest interest, according to the latest issue of The Cerulli Edge-Global Edition.
Of the 56 European institutions surveyed by global analytics firm Cerulli Associates, in partnership with Institutional Investor, 53% plan to increase their exposure to infrastructure over the next 12 to 24 months.
"Real estate, hedge funds, and private equity can also expect near-term inflows, with net 36%, 21%, and 13% respectively of investors due to boost allocations," says Barbara Wall, Europe research director at Cerulli. "Over the next five years, this pattern looks set to remain largely unaffected-but with a widening spread."
Over the next three to five years, the picture looks rosier still for infrastructure and private equity, with anticipated increases from 55% and 15% of investors, respectively. Hedge funds, however, drop to 12%, suggesting shorter-term horizons for many of Europe's upcoming allocators, said Cerulli.
"Diversification continues to be the main driver of investor demand for alternative investments. The factor was picked by almost 60% of the European institutions polled, with its closest rival, volatility dampener, attracting just 15%," says Laura D'Ippolito, a senior analyst at Cerulli.
