The managers most in demand by US investors are those with compelling presences in global and emerging markets’ equities, hedge funds, funds of hedge funds, private equity and real assets.
The 2011 Consultant Search Forecast by eVestment Alliance and Casey, Quirk & Associates shows that more than 80 per cent of investment consultants expect to look outside the US, according to the eVestment and Casey Quirk survey, the fifth of its kind.
The survey, ‘Old Wine in New Bottles’, questioned 55 investment consultants in the US and Canada, with a total of $10.4 trillion in assets under advisement.
The main trends were continuing globalisation of portfolios; a growth in alternative investments such as hedge funds, private equity and real estate; and more emphasis on outcome-oriented portfolios built by risk budgeting and return attribution.
Heath Wilson (pictured), eVestment principal and founder, said sluggish growth in searches was expected because many investors were still emerging from the policy rebalancing done in the late 2009 and 2010.
Casey Quirk partner, Yariv Itah, said that one of the most interesting findings in this fifth survey was the increasing interest in private equity and real assets. “Institutional investors increasingly manage towards outcomes rather than just excess return, and they want asset managers who can use illiquid investments to mitigate inflation risk and manager liabilities.”
Other findings of the survey included:
- consultants expect significant increases in private equity and real estate mandates this year
- half those surveyed expect institutional interest in inflation-hedging strategies to rise
- three-fifths of consultants expect moderate or strong bond search activity
- more than one-third of consultants expect more emerging markets equity and less international developed markets activity for the rest of 2011
- more than one-third of consultants anticipate more liability-driven investing mandates, and
- more than half of US equity, US bond and EAFE searches will involve manager replacements this year