Institutional investors to embrace illiquid assets and active management in 2016, says BlackRock survey

An article posted on www.hedgeweek.com based on a December 2015 poll of over 170 of Blackrock’s largest institutional clients representing USD 6.6 trillion in AUM, unveiled potential changes to their asset allocations in 2016.

“Many investors are looking to illiquid assets to insulate themselves from market volatility and reap the rewards of illiquidity premia.”
Mark McCombe, Senior Managing Director and Global Head of BlackRock’s Institutional Client Business.

Here are some of the key findings:

  • Illiquid and alternatives strategies continue to attract clients seeking additional sources of return
  • The sectors that saw the largest increase in investor interest were long-dated illiquid strategies. Led by private credit, with over half of the respondents indicating an increased allocation
  • Within fixed income, institutions are anticipating modest reductions to their fixed income portfolios (24 per cent increase/30 per cent decrease/-6 per cent net) with the majority of that reduction coming from their core allocations (14 per cent increase/32 per cent decrease/- 18 per cent net)
  • Within fixed income, 44 per cent of EMEA clients plan to decrease their core allocation (with 13 per cent planning to increase) and 58 per cent plan to increase their investments in private credit (with 5 per cent planning to decrease)

Read the full article here

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