New Research Suggests Swing Towards Alternative Investments

Research consultants Alternative Asset Analysis (AAA) have announced that new figures showing a major swing towards alternative assets is a positive indicator for the industry as a whole.

Cogent Research has found that three quarters of retail financial advisers have steered their clients towards alternatives, with each client having an average of 11 per cent of their portfolios invested in non-traditional assets.

These alternative assets can include anything from hedge funds, and private equity, to forestry and real estate. AAA welcomes the news that 80 per cent of those questioned said that diversifying their portfolios was the main reason behind their decision to opt for alternatives, and the same number also said alternatives help them to reduce the risk held in their portfolios.

One respondent, Erin Scannell of Johnson Scannel, explained that the clients themselves are becoming increasingly interested in alternative investments: “Most of our clients are retired and more of them seem anxious with the general stock market so they are using more and more alternatives.”

AAA’s analysis partner, Anthony Johnson, said that it was this move towards the investors themselves putting pressure on their fund managers to opt for alternative asset classes over traditional assets that is the most positive sign. He explained, “As an alternative investment advocacy group, we welcome the results of this study, which shows that retail financial advisers and their clients are moving more of their money into non-traditional assets.”

AAA supports investment in ethical projects that also offer portfolio diversification, such as the sustainable forestry projects run in Brazil by firms like Greenwood Management. Mr Johnson said, “When looking at alternative assets, it’s vital to consider social and ecological factors and ensure that the project is responsible from both these angles.”

Some 22 per cent of the report’s respondents said they do not include alternatives in their portfolios. However, almost half of these said that this was because they lacked understanding of the assets and options available to them.

About Alternative Asset Analysis:
The remit of Alternative Asset Analysis is to analyse and provide news on the global performance of a wide range of alternative asset classes including, but not restricted to, commodities, real estate, forestry, foreign exchange, hedge funds, private equity and venture capital.

Contact:
Anthony Johnson
Alternative Asset Analysis
71 Commercial St
Boston, MA 02109-1320
617-939-9596