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Laxman Pai, Opalesque Asia:

Institutional investors expect to increase allocations to real assets over the next 12 months in the face of a challenging political and economic environment, according to Aviva Investors' 2020 Real Assets Survey.

With uncertainty over global growth and the likelihood of interest rates remaining lower for longer, institutional investors continue to look at private assets for diversification and potential illiquidity premium over public markets said the survey.

The findings, based on the responses of 500 insurance and pension fund investment decision-makers, found that 51% of insurance and 37% of pension fund executives expect their investments in real assets to increase.

Both insurers (44%) and pension funds (38%) said escalating trade wars were a concern to their real asset investments over the next 12 months, whilst the continued lack of clarity over the future relationship between the UK and the European Union was also a concern.

90% of respondents consider ESG an 'important factor' in real asset investments

The report emphasized the increasing importance investors place on environmental, social and governance (ESG) issues and the desire to demonstrate that real assets have a broader benefit than financial returns.

Nine in 10 respondents said they consider ESG to be important in investment decision making, and of these, 40% of insurers and 42% of pension funds consider a 'favorable ESG impact' of Real Ass......................

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