Institutional Investor Study 2023
Investors target sustainability and private assets amid energy transition opportunities as geopolitics and inflation concerns remain.About the Study
Schroders annual Institutional Investor Study analyses the investment perspectives of 770 global institutional investors on the investment landscape, sustainability and private assets. The respondents represent a spectrum of institutions, including corporate and public pension plans, insurance companies, official institutions, endowments and foundations, collectively responsible for US$34.7 trillion in assets. The research was carried out via an extensive global survey during June 2023.
Key global findings
Geopolitical uncertainty and high inflation concerns remain
More than half of global respondents worry about the impact of geopolitical uncertainty and high inflation on portfolio performance in the next 12 months.
Energy transition will spur investment in innovation
67% believe that decarbonisation and the energy transition will spur investments in innovation, creating significant investment opportunities in green technology. 41% believe that infrastructure/renewables are best placed to capture investment opportunities presented by decarbonisation trends in the medium-term.
Deglobalisation is seen by investors as positive for private markets
49% agree that the effects of deglobalisation will encourage investors to have more exposure to private markets to capture innovation in productivity-enabling technologies. 52% also believe that the deglobalisation trend will result in investors looking to invest in companies with more localised supply chains.
Outcomes-driven approach key for active ownership
56% of global respondents cite that tangible evidence of real-world outcomes is crucial for an engagement strategy, followed by evidence of improved financial performance (44%). Similarly, corporate governance is highlighted as a priority theme in active ownership across all markets (71%).
Greater support needed to reach net zero target
51% of respondents think their organisation needs support in measuring and tracking their net zero path, up from 37% last year. Results showed that 49% of investors believe that a greater consensus is also required around the respective frameworks and methodologies which measure net zero pathways, in order for them to achieve their commitments.
Accessing new investment themes via private assets
54% are seeking to proactively allocate to harness the investment opportunities presented by the energy transition and technological revolution though a greater exposure to private assets. Similarly, when asked why they would consider investing in sustainability and impact strategies, two-thirds of respondents expressed an appetite for investing in new sectors such as nature-based solutions and green hydrogen to achieve portfolio diversification and expand into new themes/asset classes.
"Markets continue to be caught in the cross currents of concerns about rate increases and worries about recessionary risks. The Study found that institutional investors’ allocations to equities may look to increase as they intend to look to capitalise on the opportunities presented by the deglobalisation, decarbonisation and demographic trends. With concerns about high inflation and high interest rates, valuations matter. A renewed focus on valuations rather than speculative growth may be required."
Directrice des Investissements du Groupe
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About the study
Schroders annual Institutional Investor Study analyses the investment perspectives of 770 global institutional investors on the investment landscape, sustainability and private assets. The respondents represent a spectrum of institutions, including corporate and public pension plans, insurance companies, official institutions, endowments and foundations, collectively responsible for US$34.7 trillion in assets. The research was carried out by CoreData Research via an extensive global survey during May-June 2023. The 770 institutional respondents were spiltsplit as follows: 200 from North America, 345 in Europe, Middle East and Africa (including UK), 195 in Asia Pacific and 30 in Latin America. Respondents are from 36 different locations.
Any opinions expressed reflect our Study and interview results as at June 2023. They are not intended to be a forecast or guarantee of future results. Throughout the report, we complement our global findings with regional results and insights from Schroders experts.