Alternative assets information provider Preqin has released its H2 2020 Investor Update: Alternative Assets, which gives a breakdown of investor attitudes by asset class, as well as the fund types, strategies and regions attracting interest.
According to the report, Covid-19 has not dampened investor enthusiasm for alternative assets.
Investors surveyed by Preqin in June 2020 are realistic about the damage the pandemic will do, with more expecting the impact on returns to be negative than positive.
In the immediate future, investment levels may dip a little but, looking forward, 93% expect to maintain or increase allocations, likely influenced by recent strong performance.
Private debt, private equity, infrastructure and real estate in particular have delivered, says the report, with more than two-thirds of investors saying returns have met expectations in the past year.
Key points
• 35% of investors anticipate a moderate decrease in returns, compared with those that believe returns will stay the same (30%) or moderately increase (26%).
• 7% believe Covid-19 will have an extremely negative impact on returns; 2% that it will be extremely positive.
• Investors said the pandemic has not affected their planned commitments for 2020 (63%) and the longer term (63%).
• Where Covid-19 has affected long-term investment strategies, 29% of investors are looking to increase commitments, 7% to decrease.
• Returns are meeting or beating expectations – 86% of investors in private equity, 81% in private debt, 80% in real estate and 88% in infrastructure said returns had either met or exceeded expectations in the past 12 months.
• In private equity, Covid-19 may have had a positive impact by reducing competitive pressures in the marketplace – the proportion of investors planning to commit more capital in the year ahead is higher (41%), compared with 40% a year ago and 29% two years ago.
Responding to the figures, Tim Morgan, Chair of the Jersey Funds Association, said: “This long-term view absolutely tallies with our experience and expectation and reinforces the need for partner jurisdictions that can provide long-term stability and certainty.
"Jersey has created a perfect ecosystem for alternatives, with more than 85% of total funds business undertaken here now in the alternatives space, including private equity, real estate, venture capital, infrastructure and hedge.”
• To download the full report click here