| 15.06.2022 72% of US institutional investors likely to invest in private equity over the next year - 54% likely to invest in hedge funds |
| Opalesque Industry Update - There is little doubt that US allocators have had their heads turned by private markets in recent years. A host of institutions and private wealth investors have been recalibrating their alternatives portfolios to larger allocations in private markets and our survey of 434 investors comprising 68 family offices, 242 foundation/endowments, 36 corporate pensions and 88 public pensions demonstrates this trend.
Hedge funds ended 2021 by posting a 10.2% gain and their first net inflow in more than five years of $25bn. But, more than that, the change of sentiment from December 2021 to April 2022 is striking and all asset classes saw a drop in likelihood to invest, with the biggest in private equity and equities - down 10% and more - and the smallest decline in real estate at 3%. Among investors, foundations/endowments are most enthused (76%) about private equity due to its capacity for disruptive, high-return impact as well as its record in seeking technological solutions to social issues like climate transition. 72% of US institutional investors likely to invest in private equity over the next year; with 54% likely to invest in hedge funds. 75% and 57% of family offices likely to invest in private equity and hedge funds respectively over the next 12 months, but are now least likely to invest in real estate due to concerns by the strong headwinds in the asset class. Consistency of team members cited as one of the leading priorities for investors in manager selection by 69% of those surveyed. Other priorities include GPs having "skin in the game" (67%) and the quality of risk management protocols (52%). Corporate pensions lean towards real estate with 67% of respondents intending to invest over the next 12 months. US investors investing in hedge funds consider US (68%) and Europe (52%) the preferred regions for investment.d net outflows respectively. |