A new study has found a continued appetite for alternative assets among institutional investors, despite their concerns about rising volatility.
In “By the Numbers: The Quest for Performance”, State Street’s independent think tank and the Fletcher School of Law and Diplomacy at Tufts University, use empirical research and manager interviews to look at investment patterns of institutional investors. The study found that the move to alternatives can enhance performance, and that the performance gap within asset classes such as private equity is widening. State Street’s Center for Applied Research global head, Kelly McKenna, said: “Not all alternatives are created equally, and neither are the investors who turn to them in the hunt for alpha. Today’s successful institutional manager will balance a desire for return with an appreciation for the complexity of portfolio risk, as well as investment and liquidity constraints, while respecting the rapid nature of market events that can implicate return objectives.”