Institutional investors managing at least $100 million are facing some significant challenges in the current market and economic environments, but what are their main focuses?
A survey of investment decision makers for endowments and foundations reveals weakened sentiment on portfolio performance with just 19% saying they are “very confident” in achieving their three-year targeted investment returns. However, 69% are confident and just 12% are not confident.
The inaugural institutional investors survey by Graystone Consulting from Morgan Stanley found that 52% of respondents plan to increase their allocations to alternatives in the next year, with this rising to 64% among smaller endowments and foundations.
Alternatives was the only asset class where more than half of respondents expect to increase allocations and may be at least partly at the expense of non-US equity the asset class with the largest share of respondents intending to reduce allocations (26%).
Private equity, private credit, and real estate are the three main focuses of alternative products currently or expected to be in use by poll participants. When surveyed, allocations to alternatives made up around one fifth of respondents’ portfolios, with slightly more for larger ($1B+ AUM) organizations than for smaller ones.
Enhanced portfolio returns, diversification, and to access idiosyncratic return sources were the top three reasons for using alts.
“Market headwinds and geopolitical uncertainty loom large, and the data suggest endowment and foundation investors are not immune from these concerns—from both investment and fundraising perspectives,” said Jeremy France, Head of Graystone Consutling. “Further, amid a market seemingly in search of direction, it’s no surprise to see these investors seeking alpha in alternatives like private equity.”
Market volatility is the top concern of poll participants (69%), followed closely by generating adequate investment returns (68%), and slowing economic growth/threat of recession (65%).
To help manage the increasingly complex investing landscape, three in ten endowments and foundations plan to grow their investment teams in the next three years, while just 6% expect to reduce staff.
Chicago-based Mesirow Fiduciary Solutions adds flexPATH's plan-level outsourced fiduciary book, boosting its retirement market reach to $164 billion.
Also, Raymond James's employee advisor channel adds breakaways from Wells Fargo and Stifel, while UBS welcomes an ex-Morgan Stanley duo in Indiana.
It promised guaranteed principal and 10% monthly returns. The SEC says it invested nothing.
Ten years after entering the fee-based annuity market, MassMutual Ascend says nearly half its lifetime sales came in the past two years alone – but barriers remain among fee-only advisors.
Amplify, WealthReach, Zeplyn and Zocks have unveiled partnerships aimed at automating portfolio management, content creation, account opening, and client communication.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
