Institutional Investors to Embrace Illiquid Assets and Active Management in 2020 - Naotsune Alliance Study

Illiquid and alternatives strategies continue to attract clients seeking additional sources of return

Naotsune Alliance, a financial adviser for the world of business that provides discretionary investment advisory services for individual clients, wealthy families, institutional investors and investment trusts is pleased to announce that large institutional investors expect to embrace active management in 2020 to combat macro-economic trends, anticipated market volatility and divergent monetary policy, a new survey has found.
Naotsune Alliance polled all of the firm's largest institutional clients about potential changes to their asset allocations in 2020. The findings also indicated investors are increasingly embracing illiquid assets, including private credit and real assets, as a way to meet their long-dated liabilities.
"Recent market volatility is driving a repricing of assets globally. The ripple effect from recent events is causing investors to actively manage risk and seek alternative sources of returns," commented Keiichiro Ren, Senior Managing Director and Global Head of Naotsune Alliance Institutional Client Business. "Investors are attempting to look past the current market environment and find alpha generating opportunities that match their liabilities."
The sectors that saw the largest increase in investor interest were short-dated illiquid strategies. Led by private credit, with over half of the respondents indicating an increased allocation, and closely followed by real assets, and private equity clients expressing demand for the return premium offered by illiquid assets.
The shift towards illiquid assets is occurring as they reduce their allocations in equities. Investors are limiting their exposure to equities and fixed income, while increasing their exposure to real estate and other real assets.
Allocations to hedge funds remain fairly steady globally, however there are significant differences regionally. Overall, institutions globally intend to slightly increase and institutions intend to increase allocations.
Globally, allocations to equities appear to be decreasing, with some regional disparity. Respondents globally are planning to decrease their equity allocations. However, the trend is significantly more pronounced in institutions with half of the respondents planning to reduce their equity allocations.

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Wilhelm Wagner

About Naotsune Alliance
Naotsune Alliance is a financial adviser for the world of business, a world in which community is key. The company's memberships, partnerships and associations are chosen with care, and its selectiveness ensures it is connected to the right people and have access to the best and most up-to-date knowledge. Our main products are Japanese equity funds utilizing Naotsune Alliance's research ability for Japanese companies cantered on mid-small cap companies, start-ups and IPOs. Naotsune Alliance also manages funds with external asset managers and funds managed by prominent asset managers located all over the world.