Salient to Investors:
Investors are growing wary of publicly traded securities as interest rate cuts at central banks helped inject liquidity into markets, bolstering bonds and stocks.
Scott Kalb at KLTI Advisors said:
- Sovereign wealth funds are increasing their allocations to alternatives
- Institutional investors are focusing on hedge funds and private equity, with real estate and infrastructure being the preferred asset classes.
- Real estate is attractive because it is bottoming in the US, infrastructure is low, and there is a lot of demand.
- Sovereign wealth funds, being long-term investors, will keep investing in emerging market assets as the prospects for those economies remain strong.
- When investing in emerging economies, the portfolio should comprise all major asset classes – private equity, real estate, infrastructure, debt, equity and commodities.
Joyce Shapiro at Franklin Templeton Investments said institutional investors may double the proportion of infrastructure investments in their portfolios within 5 to 10 years.