The number of institutional investors who believe equity markets have peaked is growing, according to a new investor update from Preqin.
Among the 177 institutional investors surveyed in July, 74% believe the equity markets peaked as of June 30, up from 61% in December and 56% one year ago. Only 6% of respondents in the current survey said the equity markets are in an expansion phase, down from 21% six months ago.
Surveyed participants, meanwhile, believe a market correction is not due until 2020 or beyond. While 73% and 65%, respectively, of private equity and real estate investors believe assets are overvalued, only a respective 17% and 19% believe a market correction will come in 2019. Fifty-six percent of private equity investors and 46% of real estate investors see that correction happening in 2020 or later.
Almost 64% of respondents, meanwhile, say their the market cycle is not affecting their allocation plans for private capital. The same percentage, however, also say they are taking more defensive positions in their hedge fund portfolios in case of a market correction.
"The important question for investors is when — and how — they can weather a correction. Alternative assets will be key for many," said Amy Bensted, head of data products at Preqin, in a news release.
Among respondents who invest in private equity and private debt, 93% and 88%, respectively, say they are satisfied with their portfolios' performances in the past 12 months.
Respondents were less enthusiastic with the performances of hedge funds and natural resources, with 46% and 37%, respectively, saying they were dissatisfied over the past 12 months.