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Matthias Knab, Opalesque for New Managers:

UK charities are preparing one of the most one-sided allocation shifts seen in the sector for years, and alternatives are the main beneficiary. Not a single charity surveyed by Rathbones Group plans to cut its exposure to private equity or hedge funds over the next two years - while more than a quarter intend to reduce their UK equity holdings.

The study, conducted for the UK wealth and asset manager among 100 senior charity executives responsible for a collective GBP 5 billion of stock market related investments, found that 98% expect to increase private equity allocations over the next two years and 92% expect to do the same with hedge funds. Real estate follows at 88%, renewables at 76%, and UK and non-UK fixed income at 77% and 75% respectively.

The direction of travel is already established. Over the past two years, 89% of the charities increased private equity allocations, while 86% did so with both hedge funds and real estate - the highest figures of any asset classes measured.

Active management regains the argument

Running alongside the move into private markets is a decisive vote for active management. Some 71% of respondents said allocations to active strategies will increase over the next three years, with 11% predicting a dramatic increase. The remaining 29% expect allocations to stay flat. None plan to reduce them.......................

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