Ortec Finance: Insurance investment managers boost private assets allocations
A new global study from Ortec Finance among insurance investment managers shows an increased appetite for private assets on the back of an expected rise in capital to invest in the year ahead.
More than three quarters of insurers and insurance asset managers say an increase in capital to invest in their organisation is definite or likely in the year ahead. Only 2% think it will definitely not happen.
The study with investment managers responsible for $10.48 trillion assets under management found two thirds of them believe private debt will see the biggest percentage increase in allocation, followed by private equity and real estate.
However, the study from Ortec Finance, a global provider of risk and return management solutions for insurers and other financial services companies, reveals concerns that the level of transparency and reporting from private fund managers is often not robust enough. More than a fifth (21%) of those polled strongly agree that these issues prevent insurers from investing in some private funds because they cannot show they are compliant with the regulations they face. 79% slightly agree.
Inflation protection is regarded as the most important reason to invest in private assets, chosen by 35%, ahead of 30% who selected diversification, while 22% chose cashflow matching and 13% returns and illiquidity premiums.
Around 62% expect distributions for private equity – the means by which private equity funds return capital to investors – to be higher in the future. Around 35% expect them to remain at the same level as in recent years.
