Most investors expect that technology will drive alternative assets under management to surpass current levels over the next 12 months.
A survey of 450 large institutional investors by BNY Mellon found a 14% jump in investors expecting allocations of alternatives to rise.
The vast majority of investors – 96% - see predictive analytics as a driving force behind the alternative assets industry in the years to come, followed in importance by cloud technology and big data analytics.
Chandresh Iyer, chief executive, alternative investment services, BNY Mellon, said: “Alternatives have been generating strong returns at a time when traditional investment classes have underperformed. No sector is immune from technology’s transformative effects and fund managers need to become disrupters if they are going to thrive.”
Those surveyed predicted that the two most significant trends in the alternatives space over the next 12 months are increased indexing and increased asset flows from financial advisors and wealthy individuals.
The balance between asset classes is expected to remain stable, with private equity having the highest share of institutions’ alternative assets – and the highest levels of outperformance versus expectations – followed by real estate, private debt and loans, infrastructure and hedge funds.
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