Alternative assets have attracted institutional capital at unprecedented rates in recent years, with private capital assets under management (AUM) growing to an estimated $7.8tn as at December 2016. Among the many catalysts for the boom in alternatives have been low correlation to traditional markets, attractive risk-adjusted returns and everincreasing transparency in many areas of the industry. Although the objectives within each alternatives strategy can vary, performance that moves towards achieving these goals will defi ne investor sentiment and confidence moving forward.
In June 2017, Preqin conducted more than 540 interviews with global institutional investors to understand their views of the alternatives industry moving into the second half of 2017 and beyond. Institutional investors’ increasing allocations to alternatives have been driven by the push for strong returns, which could not be achieved without increased exposure to the space. On such a large scale, diversifi cation away from traditional markets and debt instruments played and continues to play a vital role in investing to meet the liabilities of insurance companies, pension funds, endowment plans and other organizations that participate in private markets.
Source : Preqin