Real estate and life settlements emerge as prime beneficiaries in investors’ shifting allocations
In a recent study by Managing Partners Group (MPG), the international asset management group, findings reveal that alternative asset classes, notably real estate and life settlements, are poised to reap substantial gains as professional investors reevaluate their portfolio allocations.
The survey encompassed a diverse pool of respondents including pension funds, family offices, insurers, and wealth managers across Switzerland, Germany, Italy, the UK, and the US.
Key takeaways from the research indicate that 47% of the surveyed professional investors anticipate a significant surge in allocations towards real estate over the next three years. Similarly, 45% of respondents express optimism about major growth in allocations to life settlements.
Hedge funds are also poised for an upswing, as 44% of those surveyed foresee substantial shifts in allocations toward this asset class. On the flip side, the study identifies comparatively lesser enthusiasm for commodities and high-yield bonds. Approximately 33% of participants predict dramatic increases in allocations to commodities, while 28% envision notable growth in high-yield bond allocations.
Interestingly, the study unveils a certain level of uncertainty among professional investors, with 10% admitting to being unsure about the specific asset classes that will witness pronounced increases in allocations.
Jeremy Leach, CEO of Managing Partners Group, highlights the accelerated growth of the alternatives sector, which is projected to expand its assets under management to USD 23.2 trillion by 2026. This growth is attributed to heightened interest from both retail investors and high-net-worth individuals. Against this backdrop, asset classes such as real estate, life settlements, and hedge funds emerge as the frontrunners poised to capitalize on the shifting investment landscape over the next three years.