Credit, private equity and real estate rank as top alts investments

Credit, private equity and real estate were the three most popular alternative investments, according to a survey of institutional asset owners and managers conducted by Clearwater Analytics between March 22 and March 25. Notably, more than 7% allocated funds to cryptocurrency.

Most respondents said they were adding allocations to credit, private equity and real estate investments. More than 44% said they would boost allocations to infrastructure.

When asked whether a potential recession or elevated inflation would influence allocations, 36% agreed, while 22% said it would change their alternatives mix. The other 42% said they wouldn't make any adjustments.

Over the past 10 years, defined benefit plans have increased their alternatives' allocation, based on data collected by Pensions & Investments for the top 1,000 U.S. retirement funds. Alternatives made up more than 27% of assets as of Sept. 30 vs. 20.5% a decade ago. Private equity allocations increased by about 260 basis points to 12.1%. Pension plans also meaningfully raised allocations to the "other" category. Comprising investments such as hedge funds, commodities and infrastructure, these were 7.8% of assets, up from 4.6% in 2011.