A new report from CIBC Mellon finds Canadian institutional investors are looking to increase their overall allocations to alternative investment strategies.
The report, published on Monday, revealed that 58% of investors surveyed said they expect their allocations to alternatives to increase within the next year.
Real estate was the most popular alternative investment, with 42% of respondents calling it their favoured sub-asset class. However, while real estate accounted for Canadian investors’ largest alternative exposure, it also had the lowest levels of performance satisfaction. Only 12% of respondents said it performed ahead of expectations, and 30% said it performed worse than expected.
Other popular sub-asset classes included infrastructure (20%), private equity (18.7%), private debt/loans (17.9%) and hedge fund investments (1.4%). Investors were most satisfied with private equity, with 47% saying it exceeded expectations and the remainder saying it met expectations.
The most significant trends investors predicted over the coming year were lower fees to investment managers (30%), increased transparency through technological innovation (28%) and a higher focus on environmental, social and corporate governance (ESG) investing (22%).