ARTICLE
7 July 2016

Institutional Investors Expect To Increase Alternative Allocations: Survey

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Herbert Smith Freehills Kramer LLP

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Almost two-thirds of those surveyed received returns of 12% or higher from their alternative allocations in 2015 and more than 25% had returns of at least 15%.
United States Finance and Banking

Institutional investors are putting more capital into alternative strategies, not with the expected goal of diversifying their portfolios or reducing risk, but with the goal of strong returns amid the current low interest rate environment, according to a BNY Mellon and FT Remark survey of 400 senior executives at institutional investment firms and 50 hedge fund executives. Almost two-thirds of those surveyed received returns of 12% or higher from their alternative allocations in 2015 and more than 25% had returns of at least 15%. The strong returns are driving investors towards increased allocations, with 29% planning to increase their alternative holdings this year, demonstrating an increased appetite for alternative elements in institutional investors' portfolios.

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