{"id":61497,"date":"2017-03-16T01:25:00","date_gmt":"2017-03-16T00:25:00","guid":{"rendered":"http:\/\/beta.next-finance.net\/note\/institutional-investors-embrace-risk-in-pursuit-of-better-returns-and-yield-finds-natixis-global-asset-management-survey\/"},"modified":"2017-03-16T01:25:00","modified_gmt":"2017-03-16T00:25:00","slug":"institutional-investors-embrace-risk-in-pursuit-of-better-returns-and-yield-finds-natixis-global-asset-management-survey","status":"publish","type":"post","link":"http:\/\/beta.next-finance.net\/en\/note\/institutional-investors-embrace-risk-in-pursuit-of-better-returns-and-yield-finds-natixis-global-asset-management-survey\/","title":{"rendered":"Institutional investors embrace risk in pursuit of better returns and yield, finds Natixis Global Asset Management Survey"},"content":{"rendered":"

Natixis Global Asset Management published today its annual international survey of
\ninstitutional investors – 500 managers of public and corporate pensions, foundations,
\nendowments, insurance funds and sovereign wealth funds in North America, Latin America,
\nthe United Kingdom, Continental Europe, Asia and the Middle East. Collectively, they
\nmanage $15.5 trillion in assets.<\/p>\n

Faced with volatility, greater risks and still-low yields, institutional investors are raising
\ntheir exposure to higher-risk assets in pursuit of better returns, At the same time, they are
\ndoubling down on risk management to better balance long-term growth objectives and
\nliquidity needs, but say they need better ways of identifying risk across their portfolios.<\/p>\n

The findings provide insight into how institutional investors, largely considered to be the
\nworld\u2019s largest, smartest investors, are using risk to their advantage. 75% of French
\ninstitutional managers, versus 62% globally, feel they can handle near-term market risk
\ndespite greater volatility, which they say poses the biggest risk to their performance.<\/p>\n

Their top organizational concern, however, is low yield. Given the prospect for greater
\nvolatility and persistence of low interest rates, few global institutions are relying on
\ntraditional portfolio strategies to meet their performance goals. In their efforts to manage
\nthe risks, they believe the more effective techniques include diversifying holdings across
\nsectors (88%), risk budgeting (83%), increasing their use of alternative investments
\n(80%) and smart beta (75%).<\/p>\n

The survey reveals that the percentage of global institutions using alternatives to manage
\nrisk has exploded from 53% in 2015 to 76% today. In addition, 56% report that their
\norganization is investing in more in illiquid assets today than they were three years ago.<\/p>\n

\u00ab While risk factors change over time, the challenge for institutional investor remains to
\ndeliver long-term results while navigating short-term market pressures,\u00bb<\/em> said Fabrice
\nChemouny, Executive Vice President and Global Head of Institutional Sales of
\nNatixis Global Asset Management \u2013 International Distribution. \u00ab Given their
\nmandates, avoiding risk is not an option for institutional investors. They have to beat the
\nodds or change the game, and they are doing so by balancing risks and embracing
\nalternatives to traditional portfolio construction, but always with an eye on their long-term
\nobjectives \u00bb. <\/em> <\/p>\n

Pursuing growth: bigger role for real assets, alternatives<\/strong><\/p>\n

In examining their goals, 70% of global investors believe their return expectations are
\nachievable, but confidence may not be as strong as it seems on the surface. Half (50%) of
\nthe institutions expect to decrease return assumptions in the next 12 months.
\nWhile most are confident they\u2019ll be able to meet their long-term liabilities, 62% think most
\nof their peers won\u2019t. 67% of French institutional agree that traditional diversification and
\nportfolio construction techniques need to be replaced with new approaches.<\/p>\n

The survey found:<\/p>\n