Arrow cube

Institutional investors in both Canada and the U.S. are planning to increase their allocations to private assets over the next three years, according to new research from Coalition Greenwich.

The firm’s survey of more than 100 institutional investors found that over 40% are looking to grow their private debt exposure, and about 33% are targeting increased private equity holdings.

These increased allocations to private assets are aiming to capitalize on “enticing short-term opportunities,” Greenwich said.

“In private equity, for example, institutions see buyout and growth investments as particularly attractive. In private debt, institutions are targeting direct lending, distressed debt and special situations,” it said.

Alongside the increased allocations to private debt and equity, 25% of investors are also seeking to boost their exposure to other private asset categories — such as private real estate equity, private infrastructure equity and venture capital, it added.

“While the move into private assets is a trend spanning institutional investors of all sizes and types, the biggest North American institutions are moving most aggressively to integrate significant private asset exposures into their portfolios,” said Todd Glickson, head of investment management, North America, at Coalition Greenwich, in a release.

This planned increase in private asset allocations represents an ongoing trend, the report said — with 42% of institutions increasing their private debt targets over the past three years, and 47% boosting their private equity targets.