A broad survey of institutional investors found that 40% of the universe will increase their allocations to alternative investment strategies over the next three to five years, said CoreData Research in a report on its findings released Tuesday.
The research firm surveyed 459 asset owners in North America, Europe and Asia in June and July and found that European investors have the largest appetite for alternatives with 46% of those surveyed responding that they intend to ramp up their commitments in this area.
In contrast, 30% of Asia-based asset owners said they will increase their exposure to strategies including private equity, private credit and real estate over the three- to five-year period vs. 35% of North American institutional investors.
"Our findings indicate that institutional investors have looked to weather the COVID-19 storm by seeking shelter in alternatives, which can enhance diversification and risk-adjusted returns," said Andrew Inwood, founder and principal of CoreData Research, in the report.
Allocations to alternative investment strategies in institutional portfolios overall now average 26% of plan assets compared with 24% in 2019, CoreData's survey data showed.