Trend for alternative investments gathers momentum

MomentumMore research published earlier this week suggested that investors are increasingly seeking alternative investments.

A McKinsey report said alternatives had made a “stunning” comeback, reaching a record of $6.5 trillion (€5.2 trillion) in assets under management globally by year-end 2011, and that growth is expected to continue.

Future growth in alternative investments will be driven by increasing allocations by institutional investors and the movement of alternatives into the retail mainstream, said McKinsey, adding that US institutional investors plan to increase their allocation to alternative investments to 28% of total portfolio assets by the end of 2013 - up from 26% in 2010.

Among other sources, the report - which is called The Mainstreaming of Alternative Investments: ‘Fueling the Next Wave of Growth in Asset Management’, and defines alternative investments as hedge funds, private equity, real estate, infrastructure and commodities – was based on global surveys of institutional investors and asset managers, and interviews with senior executives at leading traditional asset management firms.

Earlier this month Russell Investments published a survey that found institutional investors anticipated rising allocations to most alternative strategy types in the next one to three years.

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