Given the uncertainty about Brexit, regulatory reform, Trump’s policy initiatives, tax reform, and creeping nationalism, investors are upbeat about the use of alternatives, especially in Europe, according to a survey of 300 institutional investors and family offices at a Context Summits meeting in Barcelona.
The survey found 71% of European investors were optimistic about the future of the alternative asset management industry, with 54% planning to increase their net positions in alternatives by the end of 2017.
These results are similar to another Context Summits 2017 survey conducted in Miami where 51% of investors said they were optimistic about the alternatives industry, and 72% planned to increase their allocations to alternative fund managers in 2017. About 75% of respondents said they prefer investing with new managers, while 48% preferred managers with track records of one to three years. Significantly, more than 59% of allocators polled at Miami earlier in the year voiced the same opinion. –
“As the data shows, European allocators—like their US-focused counterparts—are overwhelmingly optimistic about the future of the industry. While challenges remain, particularly in the political and regulatory realms, the overall consensus is that there is strong demand for new strategies and ideas,” according to Mark Salameh, co-founder and CEO of Context Summits.
On the political front, investors voiced mixed opinions on the impact of Brexit, with 40% calling it an opportunity, 35% a threat, and 25% taking a neutral stance. There was also major concern about the rise of nationalism in France, with more than 63% of investors saying changes to the EU presented the greatest long-term challenge to Europe. Investors were especially worried about the slowdown of globalization, the replacement of free-market policies, and a recession resulting from a weakened economy.
On regulatory issues, 78% of respondents said European financial regulations, such as MiFID II, were a problem due to excessive costs, restrictions, and unpredictability. Only 8% thought regulations benefitted the industry.