Report Summary
Real assets --primarily real estate, infrastructure and commodities-- are an increasing focus of the world’s institutional investors. The trend is part of a broader move into alternative investments by institutions that are seeking to lessen their reliance on traditional stocks and bonds amid the challenging conditions of the post-crisis years.
A global survey, sponsored by BlackRock, of 201 executives from institutional investment organizations, acknowledges the continued evolution of real assets as building blocks in institutional portfolios.
The report sheds light on what is driving this growing interest in real assets and how investors are increasing their exposure to them. It also highlights trends within the principal real asset categories (real estate, infrastructure and commodities) and discusses investment strategies across each.
"The acid test [for real assets] will be when bond yields rise in a few years. We are seeing the start of that cycle now and how real assets perform for us in the coming years, and through the rest of the cycle, will prove to be the most important thing for us. "
-Raphael Arndt, Chief investment officer of Future Fund of Australia
Research Methodology
In September 2014, The Economist Intelligence Unit conducted a global survey of 201 executives from institutional investment organizations across 30 countries. All of the respondents indicated that they have significant responsibility for investment decisions and that their organization currently invests in real assets. Approximately one-third of the organizations represented in the survey have assets under management of more than $75bn, with a similar proportion reporting between $1bn and $5bn. The survey findings were complemented by in-depth interviews with eight senior financial executives at institutional investors across the globe.
