Institutional investors rethinking asset allocation and portfolio construction processes
The world's top-tier of institutional investors is a heavyweight grouping with trillions of dollars under management. A new report from McKinsey, below, examines the future plans of these organisations, revealing a significant rethink of their asset allocation and portfolio construction processes.
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From Big to Great: The world's leading institutional investors (McKinsey, 2016)
The world's largest institutional investors have grown significantly since the financial crisis, both in terms of AUM and in terms of the size and complexity of their organisations. This new report from McKinsey reveals seven key areas where these institutions plan to develop or rethink their capabilities and strategy in the years ahead.
Split Decisions: Institutional Investment in Alternative Assets (BNY Mellon, 2016)
Institutional investors have been steadily growing their alternative asset portfolios over the last decade, spreading across hedge funds, private equity, real estate and infrastructure. This study suggests that the trend will continue.
Redefining the Asset Management Operating Model (Oliver Wyman, 2016)
Look out for the recognition of Savvy Investor on page 6 of this report! Asset management CEOs are unsettled by rising regulatory costs, inconsistent alpha, and the shift towards index products. To stay ahead of the game, investment firms must be prepared for significant changes in the operating environment, whilst keeping control over costs.
A framework for institutional portfolio construction (Vanguard, 2016)
Typically, institutional investors around the world pursue one of four investment goals: absolute return, liability-driven investment, total return or principal protection. Generally, they choose from four different investment approaches: static tilts, traditional active management, market-capitalization exposures and alternative investments. This paper considers which are the best for investors building their portfolio.
How Insurers Can Navigate the Era of Negative Interest Rates (PineBridge, July 2016)
Insurance companies face major challenges in a negative rate environment. However, there are a number of potential solutions. Learning from the experience in Asian markets (such as Japan, Korea and Taiwan) with prolonged low interest rates may help insurers create the right strategies in their markets.