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Alternative Market Briefing

GSAM survey says insurers with $13tn ready for portfolio risk

Thursday, April 22, 2021

Laxman Pai, Opalesque Asia:

Goldman Sachs Asset Management (GSAM) annual insurance survey revealed that asset managers responsible for investing more than $13 trillion in assets worldwide are planning to take on more risk as the global economy recovers.

"Insurers plan to increase the risk in their investment portfolios, likely by shifting cash balances into higher-risk asset classes. As uncertainties have waned amidst the global pandemic, risk sentiment has emerged decidedly positive," it said.

The survey revealed that as global interest rates maintain historically low levels, investors continue to prioritize return-enhancing assets-private equity, middle-market corporate loans, infrastructure debt, collateralized loan obligations, and emerging market debt.

34% of 286 chief investment officers and chief financial officers polled said they plan to increase portfolio risk, compared with 8% planning a decrease, according to survey results. The spread -- 26 percentage points -- is significantly above the survey's historical average of 15%, it said.

"We expect a continued retraction of liquidity in favor of increased equity, credit, and duration risks," the survey noted.

Private equity over hedge funds

The Goldman Sachs Asset Management said that insurers want to put more money into private equity this year while scaling back on hedge funds.

Thirty-eight percent of respondents plan to increase their allocation to private equity ......................

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