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Alternatives are “essential” for alpha, say institutions

Fund portfolioMany institutional investors think investing in alternatives is “essential” for diversifying portfolio risk, a survey found.

The Natixis Investment Managers survey found 70% of investors had this view and that 57% said investing in alternatives was necessary to outperform the broader market.

The top choices for providing a source of stable income as interest rates rise and the 30-year bond bull market ends include infrastructure (55%) and private debt (47%).

Almost three-quarters of respondents said the potential returns of illiquid investments were worth the risk.

Just under 60% said they found alpha in environmental, social and governance investing.

Natixis surveyed 500 institutions.

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