For investment managers, the capabilities most in demand this year from retirement plans, endowments and foundations will be global and emerging markets investing, hedge funds, private equity and real assets, according to the 2011 Consultant Search Forecast.
The survey, conducted by technology firm eVestment Alliance and consulting firm Casey, Quirk & Associates, polled 55 investment-consulting firms in the U.S. and Canada responsible for a combined $10.4 trillion in assets under advisement. Several key trends emerged that Casey Quirk & Associates says could reshape institutional investment in North America. They include: 1) Ongoing portfolio globalization; 2) An increasing role of “alternative” investments—hedge funds, private equity and real estate; and, 3) A greater emphasis on “outcome-oriented” strategies by using risk budgeting and return attribution.
Other findings include: More than one-third of respondents expect more emerging markets equity and less international developed markets activity for the remainder of the year; 60% of consultants expect moderate or strong bond search activity this year; consultants expect significant increases in private equity and real estate mandates in 2011.
"One of the more interesting findings in this year's consultant survey is the rising interest in private equity and real assets," said Casey Quirk Partner Yariv Itah. "Institutional investors increasingly manage toward outcomes rather than just excess return, and they want asset managers who can use illiquid investments to mitigate inflation risk and manage liabilities."
This was the fifth annual poll conducted jointly by eVestment Alliance and Casey, Quirk & Associates.