Schroder's

This year’s Study highlights that even at the height of the Covid-19 pandemic and subsequent economic panic, investors believe they are planning to increase their allocations to private assets from 12.8% a year ago to 14.1% over the next 12 months.

Expected allocation over the next 12 months Current allocation

2020

2019

2018

Current allocation
Expected allocation over the next 12 months
Most investors believe it is too early to say how Covid-19 will impact their private asset allocations.

it will have no or limited impact

%

it is too early to know the impact of Covid-19

%

it will slow down their allocations until the situation stabilises

%

it will accelerate their allocation to private assets

%

Private equity, infrastructure equity and private debt are expected to see allocation increases over the next three years.

  •  

    • Image of a continent EMEA
    • Image of a continent North America
    • Image of a continent Asia-Pacific
    • Image of a continent Latin America
  • Private equity

    • %
    • %
    • %
    • %
  • Infrastructure equity

    • %
    • %
    • %
    • %
  • Private debt (corporate)

    • %
    • %
    • %
    • %
  • Real estate

    • %
    • %
    • %
    • %
  • Real estate debt

    • %
    • %
    • %
    • %
  • Infrastructure debt

    • %
    • %
    • %
    • %
  • Insurance-linked securities

    • %
    • %
    • %
    • %
Higher returns and the benefits of diversification continue to be the key drivers for investing in private assets, highlighting the resilience of the asset class.
2019 2020

Higher returns over the long-term

Diversification

To better manage risk

To capture real value add from the operation of the underlying asset

  • To generate higher returns over the long-term
  • To diversify your portfolio
  • To better manage risk
  • To capture real value add from the operation of the underlying asset
2019
2020
Institutional investors identified the following as key criteria when selecting a private asset manager.
Performance track record
%
Investment philosophy
%
Fees, terms and conditions
%

Valuations, transparency and fees have historically provided investors with challenges to access private markets. We would note, that these concerns are asset class and sector dependent, and that opportunities are abound for those able to find value away from crowded and overvalued trades.

Pie chart for Covid-19 impact on business
36%

High dry powder levels(39% in 2019)

38%

Complexity of the markets(32% in 2019)

39%

Defaults / investment failure(44% in 2019)

57%

High valuations(69% in 2019)

52%

Lack of transparency(57% in 2019)

52%

Higher fees(54% in 2019)

48%

High risk

Fees, liquidity and complexity remain the greatest obstacles when investing in private assets.
2019 2020

Fees (high cost and complexity)

Liquidity issues

Complexity

Lack of internal investment skills/resources

High minimum investment requirement

High minimum investment requirement

In-house restrictions

  • Fees (high cost and complexity)
  • Liquidity issues
  • Complexity
  • Lack of internal investment skills/resources
  • High minimum investment requirement
  • Governmental/regulatory barriers
  • In-house restrictions
2019
2020

Download the report or continue exploring

Schroders commissioned CoreData to conduct the fourth annual Institutional Investor Study to analyse the world’s largest investors’ key areas of focus and concern including the macroeconomic and geopolitical climate, return expectations, asset allocation and attitudes to private assets and sustainable investing. The respondent pool represents a broad spectrum of institutions, including pension funds, insurance companies, sovereign wealth funds, endowments and foundations owning approximately $25.9 trillion in assets. The 650 respondents were spilt as follows: 179 in North America, 248 in Europe and South Africa, 173 in Asia-Pacific and 50 in Latin America.

Schroders is een wereldwijde asset manager met vestigingen in 35 regio’s, in Europa, Noord-, Midden- en Zuid-Amerika, Azië en het Midden-Oosten.


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