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Alternative Market Briefing

Investors pivot to private assets as geopolitical tensions increase Schroders finds

Tuesday, October 01, 2019

Bailey McCann, Opalesque New York:

Institutional investors are pivoting to private assets as increasing geopolitical tension and fear of a global economic slowdown soar, according to Schroders Institutional Investor Study.

The study - which surveyed 650 institutional investors encompassing approximately $25.4 trillion in assets - has identified a growing apprehension among investors amid a backdrop of increasing macroeconomic uncertainty.

Brexit leads concerns for investors. 52% said that events like Brexit and the trade ward could impact portfolio performance over the next 12 months. This is a marked increase from a year prior when 44% of investors reported similar concerns.

Over a third of investors (37%) cited a global economic slowdown as the biggest concern, up from 27% in last year's survey. Global growth has already started to slow heading into the back half of the year. The trade war could put additional pressure on world markets if new tariffs are put in place.

In contrast, factors previously thought to be very influential - such as monetary policy tapering, regulation and the risk of cyber-attacks - have all steadily decreased in importance over the past 12 months.

The wall of worry is driving investors to consider rebalancing. Just a third of investors (29%) are holding their investments for the next 3-5 years, with only 10% remaining invested for a full cycle. This comes as more than half (53%) of investors stated that there is a......................

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