A new report reflecting the views of institutional investors in private equity funds, hedge funds, real estate and infrastructure says that their impression of alternative investments is “particularly positive” over the next 12 months.
The report, Preqin Investor Outlook: Alternative Assets H1 2014 (PDF), said that investors across all asset classes are planning to put the same or more capital into alternative assets. That’s good news for private equity and hedge funds, which are looking to raise more investment capital.
Investors surveyed for the report stated that the best investment opportunities in 2014 are in: private equity, 45 percent, while 23 percent said hedge funds, 18 percent said real estate and 14 percent in infrastructure.
The report also said that 68 percent of investors surveyed are looking to invest in private equity funds in the first half of 2014, and 87 percent said private equity investments have met or exceeded their expectations.
The countries and regions in the emerging markets arena that investors believe offer the best opportunities are: Asia, 49 percent, China, 31 percent, South America, 27 percent and India, 22 percent.
As for hedge funds, 2013 wowed investors. The survey showed that 84 percent of investors met or exceeded expectations over the year. There should be a loud “thanks” to a bull run in the stock market. Investing in a co-mingled single manager hedge fund was the favorite choice, according to the report, with 85 percent of searches including this set up.
One final note as to what investors are looking for in hedge funds. The survey showed that 29 percent of investors wanted high absolute returns, 28 percent chose hedge funds that had low volatility returns, 25 percent pick high risk adjusted returns and 15 percent picked non-correlated returns to the stock market.