According to Turning the Corner, the sixth annual diagnostic report on not-for-profit healthcare investments by Goldman Sachs Asset Management, institutions are increasingly allocating their unrestricted cash and investment (UCI) pools to assets other than public equities, particularly private markets.

These "alternative" asset classes mostly include private markets as well as other areas like hedge funds. The larger the UCI pool, the greater the allocation to alternatives. The latest data, as of year-end 2022, closed at 32% in allocations to alternatives, thanks to the largest such year-on-year increase since Goldman Sachs Asset Management began tracking these numbers for its diagnostic reports.

"Some of that increase may be based on the public market selloff in 2022, though intended allocation changes revealed later on point to a more secular trend," the report's authors write - implying that the transformation wasn't related to a one-off event like the 2022 equities selloff alone.

In the survey, 41% of respondents expressed an intention to ramp up UCI allocations to alternatives in 2024. In comparison, only 11% said they'd increase allocations to public equities.

The report was based on a survey of 37 leading US healthcare systems and hospitals, with around $379 billion in investments.

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