According to “Race for Assets: Canada vs. the World” – a CIBC Mellon survey of 50 Canadian institutional investors

Alternative investments are certainly the flavour of the season for Canadian institutional investors, according to data from a CIBC Mellon survey. More than half (58%) plan to increase their allocations to alternatives, while 42% said they will maintain existing levels. Across the world, a previous BNY Mellon report said only 53% of investors planned to increase allocations.

Why Canadian investors favour alternatives

The lure of strong returns with comparatively lower short term risk is attracting institutions to alternative investments according to Jon Lofto, director of alternatives at CIBC Mellon.

The surveyed institutions included pensions, endowments, foundations and insurance companies. On aggregate, these institutions had a median AUM of $3.2 billion and minimum $330 million.

The Break-up

The categories in the alt universe that are likely to see higher allocations are private equity, infrastructure, private debt and hedge funds. However, real estate will likely get lower allocations.