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Laxman Pai, Opalesque Asia: 84 percent of respondents of a survey said they expect institutional investors will increasingly focus on structured credit because they offer attractive yields when compared to other asset classes.
And almost all (95 percent) agreed the bespoke nature of alternative credit presents a viable option for investors to make a positive social and environmental impact by educating smaller companies in the financing market, said a report by Aeon Investments.
When it comes to alternative credit, more than a fifth (22 percent) of respondents cited attractive returns, and one in five (20 percent) selected the sector's growing focus on ESG. Some 13 percent cited structured credit's ability to offer attractive diversification benefits as one of their top three reasons.
"While global institutional investors expect losses to continue in the fixed income market and are concerned that central banks may be too optimistic on the peak of inflation, they're also finding good news in alternative investments and the importance of environmental, social, and governance factors," the report stated.
The report, which surveyed pension funds and other institutional investors across Denmark, Finland, Germany, Italy, Norway, Sweden, Switzerland, the U.K., and the U.S., found that 43 percent of respondents said they expect fixed-income performance to deteriorate further over the next 12 months, with 13 percent expecting a significant decline.
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