Alternative investing is on the up, according to the latest Invesco survey of European institutional investment trends.
The European Institutional Asset Management Survey (EIAMS) of 125 financial institutions - including pension funds, insurance companies and foundations, across Germany France Italy and the Benelux region - revealed that 91% of investors believed that the asset class will develop significantly.*
In France, the main reason cited for using alternatives was risk diversification.
Other findings included:
-Only 38% of investors reported an increase in assets under management (AUM) during 2000, compared with 65% in 1999. But 69% of respondents claimed that AUMs had increased or stabilised during 2000, despite market volatility.
-Overall, fixed income remained the preferred asset class (51%) compared with equities (24%). However, bonds were most favoured in Germany, France and Italy, compared with the Benelux region which was overweight in equities, averaging at 41.8%.
-Passive management remained the favourite investment style (35%), closely followed by value style (31%) and growth (24%).
-Fund of funds products were also most favoured in France where 58% of investors used them, but in Germany 90% of investors claim never to use them.
-Open-ended fund vehicles are most popular in France and Italy - where they are gaining popularity - but tend to be ignored In Germany, where 86% of investors prefer the ‘spezialfond’.
-Allocation to external asset managers remained stable, with 62% of those surveyed outsourcing. The majority of institutions (39%) outsourced their management of equities. However, the survey also revealed that the most investors do not plan to increase business to external managers.
-Investment horizons also seem to have lengthened with the overall outlook now medium to long-term.
-Consultants are also expected to increase their influence with just less than 80% of investors saying consultant use is on the up.
*Those surveyed had reported combined assets of EUR479bn.
By Madhu Kalia
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