FUNDRAISING NEWS | November 26, 2024
Asset owners will continue to increase allocations to private markets investments, in particular private credit and infrastructure, and are especially interested in secondaries and open-ended funds, as well as those pursuing a thematic approach in AI and climate, bfinance reports.
In its new Global Asset Owner Survey, conducted in late 2024, investment management and consulting firm bfinance received responses from 311 senior investors managing over $7 trillion in assets. Pension funds represented 43% of respondents, followed by insurers at 21%, foundations and endowments (8%), family offices (7%), and wealth managers (7%). Those identifying as “other” or a combination of the above represented 16% of respondents.
Despite expressing only moderate satisfaction with private equity managers (69% satisfaction), nearly a third of respondents said they intend to increase exposures in 2025, and overall, 53% of respondents said they are planning to increase exposure to private equity, private debt, and infrastructure over the next 18 months. Satisfaction is especially high in private credit (84%) and infrastructure (79%), and many institutions reported placing greater emphasis on alternative strategies within private markets, including secondaries (37% of respondents increasing exposure) and open-ended funds (44% of wealth managers entering this space). Real estate managers appear to be the most under pressure, with only 35% of respondents expressing satisfaction with these strategies, a sharp drop from 89% satisfaction the last time the report was produced, in 2022.
Looking ahead, investors are adjusting their asset allocations in response to emerging opportunities and risks. While emerging market equities are seeing a reduction in exposure, impact strategies are gaining traction, with 24% of investors planning to increase allocations. There is also growing interest in thematic investments, such as climate transition and artificial intelligence, with 40% of investors seeing strong opportunities in both areas.
As for future risk exposures, the survey also found that geopolitical unrest and macroeconomic growth concerns are top of mind for many investors, with 54% of respondents citing geopolitical instability as a major concern. To help mitigate risks, 75% of respondents want to increase the resilience of their portfolios, though notably 40% of defined-benefit pensions were satisfied with their portfolio resilience, the highest among the types of asset owners surveyed.
Access the report here: https://www.bfinance.com/us/insights/global-asset-owner-survey-risk-and-resilience
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