Majority of Investors Plan to Increase Allocation to Alternative Investments in 2015
A significant majority of high net worth and institutional investors plan to increase their allocation to alternative funds in 2015, according to a survey conducted by Altegris Advisors.
Findings of the Altegris Investor Survey, conducted at the Strategic Investment Conference, hosted by Altegris and Mauldin Economics, revealed that 66 percent of respondents plan to increase their allocation to alternatives during the second half of 2015 – of which managed futures/global macro (32 percent) and private equity (28 percent) ranked as the top asset classes for increasing. Registered Investment Advisers (45 percent) and Private Investors (31 percent) put managed futures/global macro at the top of their list, while Institutions (36 percent) put Private Equity at the top. More than half of respondents (59 percent) said that alternative allocations should represent 10-25 percent of a diversified portfolio, while 15 percent thought the number should be between 25 and 50 percent. Only 23 percent believe the allocation should be less than 10 percent.
“Our annual Strategic Investment Conference opens a dialogue of global markets, economics, and technology discussions to a group of sophisticated investors over the course of three days,” said Jack Rivkin, Chief Executive Officer and Chief Investment Officer of Altegris Advisors. “The findings of the Altegris Investment Survey represents a key indication of the role various alternative classes are increasingly playing in portfolios.”
When asked how investors are using alternatives in their portfolios, an overwhelming majority of respondents (63 percent) noted they use alternatives to complement traditional strategies, 17 percent use alternatives as a substitute for traditional stock strategies, and 15 percent use alternatives to hedge against volatility in the market. Of particular interest, 60 percent of respondents indicated that clarity regarding investment philosophy/strategy is the most important attribute to choosing an alternative fund. Only 19 percent selected historical returns as most important, 24 percent indicated that lack of clarity regarding investment philosophy/strategy was a major concern regarding investing in alternatives, and 53 percent expressed concerns about fees.
“While investors are beginning to see the value of alternatives in a portfolio, the industry still has work to do to ensure that clients understand the role and net return characteristics of specific alternative strategies,” said Matt Osborne, Co-President, Head of Marketing and Business Development at Altegris Advisors. “This is particularly the case as more alternative strategies, such as private equity, become available to a wider audience of qualified investors.”
About the Altegris Investor Survey
The Altegris Investor Survey was conducted at the 2015 Strategic Investment Conference which took place April 29-May 2 in San Diego, CA. Respondents were event attendees described as private investors, institutional investors, registered investment advisors, hedge fund managers, bank/wirehouse advisors and independent broker/dealer advisors. The data is based on responses from 124 random respondents of the 649 attendees.
Altegris searches the world to find what we believe are the best alternative investments. Our suite of alternative investment solutions are designed for financial professionals and individuals seeking to improve portfolio diversification.
With one of the leading research and investment groups focused solely on alternatives, Altegris follows a disciplined process for identifying, evaluating, selecting and monitoring investment talent across a spectrum of alternative strategies including managed futures, global macro, long/short equity, private equity, event-driven and others.
Veteran experts in the art and science of alternatives, Altegris guides investors through the complex and often opaque universe of alternative investing. Alternatives are in our DNA. Our very name, Altegris, highlights our singular focus on alternatives, the highest standards of integrity, and a process that constantly seeks to minimize investor risk while maximizing potential returns.
The Altegris group of affiliated companies is wholly-owned and controlled by (i) private equity funds managed by Aquiline Capital Partners LLC and its affiliates (Aquiline), and by Genstar Capital Management, LLC and its affiliates (Genstar), and (ii) certain senior management of Altegris and other affiliates. Established in 2005, Aquiline focuses its investments exclusively in the financial services industry. Established in 1988, Genstar focuses its investment efforts across a variety of industries and sectors, including financial services. The Altegris companies include Altegris Investments, Altegris Advisors, and Altegris Clearing Solutions. As of March 31, 2015, Altegris had $2.65 billion in client assets.
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