BlackRock clients plan to boost real assets allocations in 2017

Real assets are anticipated to be the largest beneficiaries of institutional asset flows in 2017, according to a recent BlackRock survey.

The survey of 240 of the asset manager’s institutional clients, representing $8 trillion in assets, found that 58 percent expect to increase allocations to real assets, which includes infrastructure, commodities, timber and farmland.

This compares favorably to the 49 percent who expected to increase their allocations in 2016, though clients have increasingly shifted into less liquid assets over the last three years. Only 3 of investors said they plan to decrease allocations in 2017.

“Institutional investors are recognizing that they need to do something different to get the investment outcomes they want. With market volatility and lower returns expected from traditional asset classes for the near future, investors are having to look elsewhere for yield,” said Edwin Conway, global head of the Institutional Client Business.

Investors across all regions are planning increases to real assets; leading the way is Continental Europe, with 69 percent responding that they plan to do so, followed by the UK (63 percent) and Asia Pacific (63 percent), the US/Canada (53-plus percent) and Latin America (36 percent).

The survey also found that the outlook for private equity flows is also positive. Over half of investors in APAC expect to make increases (52-plus percent), followed by Latin America (47-plus percent) and Continental Europe (44-plus percent). EMEA and the US/Canada plan to increase private equity holdings by more than 33 percent and 32 percent, respectively.

All percentages cited in this article are net figures.