Survey Reveals Big Shift to Private Investments

Natixis Investment Managers has released the results of its survey of investment managers this week.

Natixis surveyed 500 institutional investors, who collectively manage more than $15 trillion in assets. These respondents manage money for pensions, insurers, sovereign wealth funds, foundations and endowments all over the world. The survey measures the investment community’s outlook and concerns for the next year. The key finding in the report is that increased volatility is the top portfolio concern of many investment managers. Most managers see no relief in sight from trade and low yield risks.

Natixis also found that there the global investment community is increasingly shifting to private investments. Roughly 79% of respondents own private equity investments, and 72% invest in private credit funds. About 37% of the managers in the survey expect to increase their allocation towards private debt. Meanwhile, 28% will increase their private equity allocation in 2020.  Real estate and infrastructure funds will also experience allocation bumps from 29% and 32%, respectively, next year.

More Results from Natixis Investment Managers

The report also found that many managers are concerned about the rising risks presented by passive investment strategies.

The report reads; “As investors have flocked to passive investments in recent years, institutional investors see significant risks ahead for individual investors and markets in general. Most significantly, 54% of institutional investors believe the excessive use of passive index funds suggests the market is ignoring fundamentals. Seven in ten suspect individual investors will prematurely liquidate investments over recession worries, but 64% worry outsized flows into and out of index funds and other passive investments will contribute even more to volatility. Another concern, according to 74% surveyed, is that individual investors have a false sense of security about passive investments and are unaware of their risks.”

David Giunta, CEO for the US at Natixis Investment Managers commented.

“Institutional investors have been steadily fortifying their portfolios in anticipation of inevitable changes in the market cycle that could make 2020 a bumpy ride for unprepared investors,” he said.  “Despite a substantial amount of uncertainty next year, institutional investors remain focused on their long-term objectives and continue to see actively managed, diversified portfolios as a prudent path to outperformance.”

You can download a full copy of the report here .