Institutional assets of investors based in continental Europe increased 7% in 2005, powered by strong equity market performance, according to a Greenwich Associates survey. Overall equity allocations rose to 26% from 23%, according to the survey of 329 institutions. Investment in European equities rose just one percentage point in 2005 to 15%, while non-European stock allocations rose to 11% from 8%.
Joan Weber, a Greenwich spokeswoman, said the firm does not release the aggregate amount of assets of the institutions surveyed.
Greenwich researchers found that about one-third of European institutional investors said they will increase allocations to Japanese equities over the next three years and 42% said they will increase investment in emerging market equities before the end of 2009.
European institutions "remain bullish on alternatives - at least in theory," although their asset allocations have remained static, said Tobias Miarka, Greenwich consultant, in a summary of the survey results. Allocations to hedge funds and private equity remained constant at 2% of assets in 2005, while real estate investment fell slightly to 5% from 6% in 2004. Mr. Miarka noted that 41% of European institutions surveyed expect to increase private equity and hedge fund investments by the end of 2009. Of European investors using hedge funds, the average allocation is €200 million ($254 million) distributed among three or four direct hedge fund or fund-of-funds investments, researchers reported.