European Investors Warm to Alternative Assets

Europe’s institutional investors believe alternative investment strategies yield returns as good as or better than traditional investments, according to the JPMorgan Fleming European Alternative Investment Strategies Survey 2003. According to the survey, which assessed the attitudes of 341 institutional investors across Europe, the percentage of investors who feel returns from alternative strategies have so far met or exceeded expectations ranges from 66% for private equity to 79% for hedge funds. Institutions cited the ‘potential for higher returns’ and ‘low correlation with other asset classes’ as the main reasons for holding alternative investments. Institutions using alternative strategies also show a strong willingness to commit more funds to them. More than half (56%) of institutions with hedge fund exposure say they intend to increase their level of investment and close to half (45%) of private equity investors want to increase allocation to this asset class. Among those institutions with exposure, the average level of assets allocated to private equity is just 3.3% and for hedge funds, the average exposure is even lower, at 2.5%. By contrast, the level of investment in real estate averages almost 11%.


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