According to an investor survey, U.S. endowments, charitable groups, pension funds, and other big organizational investors are gaining on more publicity in non-conventional substitute investments like hedge funds and private equities to shield against volatile stock markets.
Natixis Global Asset Management surveyed around 151 US managers, out of which 76% told that alternatives are needed in safeguarding against risk, whereas 73% felt that they are vital to do better than the broader market.
However, the shift into hedge funds steps in as the 2-trillion dollar industry again does not doo as good as the broader US market indexes. Through August end, hedge funds profited around 4%, falling behind 13.5% total returns in the standard S&P’s 500 index, as per reports from Credit Suisse.
The posts of stock markets have been showing excellent returns for this year, but still ripped off occasionally by perturbing news like financial slowdown in China and Europe, the financial face of perishing US tax reductions and auto government spending cuts in the upcoming year, and Fed’s vast bond-purchasing programs.
According to the survey, 88% of the managers, who individually oversee around 30 billion dollars in assets, are happy with the substitutes’ performance they invest in and 93% would maintain or increase the same substitutes’ disclosure if they could move back and reassess.
The online survey was conducted by Natixis Global Asset Management in the months of June and July, and the contestants included public and corporate pension funds, insurance liabilities and reserves, sovereign wealth funds, and foundations, and endowments.
Natixis Global Asset Management managed 711 billion dollar assets as of 30th June and has investments in many associates like Sayles and Co, Loomis, Aurora Investment Management LLC, and Harris Associates LP.
Public strategies with over one billion dollar had average 15% publicity to non-conventional investments as of June 2012, the maximum ever and higher than 9.2% in June 2011, as per reports from Wilshire Trust Universe Comparison Service.
The survey showed that the enhanced trust in the alternatives is an effort to rescale management of risk in the market volatility face and the threats put forward by the tighter regulation and debt crisis of euro zone.
The chief executive and president of Natixis Global Asset Management in Asia and America, John Hailer said that risks like those of the forthcoming elections are turning out to be more significant to organizational investors.
The results of the survey show that the managers are taking a new move to risk management, according to Hailer.