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Beverly Chandler, Opalesque London: A new report from State Street, The Asset Owner’s Perspective: Evolving Investment and Operational Models, finds that 45% of asset owners have found that low yields
on traditional assets have increased their
organisation’s appetite for alternatives,
particularly among institutions at the smaller
end of the market.
However, examination of the endowment model post the financial crisis, revealed that the users of the endowment system were disappointed at the high level of correlation between alternative assets and equity markets during the crisis. Despite that, the endowment model remains popular with 84% considering the model a highly effective framework for today’s markets.
Leverage and liquidity issues also challenged some asset owners, who are addressing the liquidity
crunch by undertaking more vigorous stress
testing and revisions of liquidity-related
investment policies.
Some 39% of those asset owners surveyed expect to increase allocations to
corporate investment-grade debt, while 30%
anticipate expanding allocations to emerging
market debt investments in the coming year.
The study found that asset owners have developed a new 'mindset’ post the financial crisis, looking at portfolios in their totality, moving away from tradi...................... To view our full article Click here
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