Alternatives join the mainstream
Alternative investing is going mainstream and investors globally are set to dedicate an even larger portion of their total investment portfolio to hedge funds, private equity and real estate over the next two years, according to a new report.
The report, released by Russell Investment Group, details the participation in and expectations for the core alternative investment strategies of large corporations in Australia, Europe, Japan and North America since 1992. It presents data by region, investment category and type of institution and includes detailed analysis of use of investment strategies, investment types, geographic allocation and expected returns.
Commenting on the report, Russell managing director of institutional investment services Stephen Roberts said alternative investments are coming into their own as widely-accepted strategies used by institutional investors to enhance returns, reduce volatility and improve diversification for their portfolios.
“The survey also demonstrates that fund of funds is emerging as the dominant investment approach for private equity and hedge funds, which we believe positions investment consultants such as Russell to meet investors’ advice and product needs in these areas,” Roberts said.
The report indicated that Australian institutional investors prefer real estate, and while private equity and hedge funds were less used, Australians expected higher returns from private equity.
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