BAI Managing Director Frank Dornseifer summarises the results of the Investor Survey as follows: "The core message of the investor survey is: Alternative investments are an elementary portfolio component of German old-age provision! The trend analyses for the coming months and years make it clear that allocation will increase - in some cases significantly. It is true, of course, that this trend is supported by the ongoing low interest rate environment, yet investors still cite portfolio diversification and a good risk-return ratio as the main reasons for investing in alternative investments. At the same time, however, it must also be stated that the coming years will bring many challenges and uncertainties for capital investments. From the investors' point of view, geopolitical risks and insufficient returns on capital investments are generally at the top of the list".
In addition to real estate, so-called private markets strategies such as infrastructure, private equity and (corporate) private debt are particularly popular with participating investors. Matthias Erb, BAI board member responsible for Alternative Markets, comments on this result as follows: "Of the 75 participating institutional investors, 82% have already increased their commitment to alternative investments within the last twelve months. The allocation is now to be expanded further from this already high level. In this context our survey identifies a particular interest among insurers in debt financing, e.g. in the areas of infrastructure, real estate and corporate private debt, but also in the private equity segment. Pension funds and pension schemes, on the other hand, want to invest more in equity, especially in real estate, infrastructure and private equity, and only then will debt capital financing follow."
However, as the BAI Investor Survey reveals, the planned additional allocation also presents challenges. Particularly in private equity and infrastructure, but also in real estate, the challenges are seen in the actual use and investment of the collected funds (dry powder or deal flow), but also in the valuation (private equity). In this context, BAI board member Andreas Kalusche, also responsible for Alternative Markets, refers to the positive experience of investors with the respective asset classes, which is also documented in the BAI Investor Survey: "Infrastructure meets investor expectations in terms of diversification effects and stable cash flows to a particularly high degree, the same applies to (corporate) private debt; in the case of private equity, the participating investors have particularly emphasised the risk/return ratio. I am confident that these asset classes in particular have potential in the future."
In addition to a thematic focus on the private debt investment segment, on which BAI published a comprehensive study in April containing important findings on corporate financing through credit funds in Germany, the Investor Survey on Sustainable Investment (ESG) also focused on other topics. BAI Managing Director Dornseifer explains: "ESG and the Sustainable Finance Initiative of the EU Commission are currently a concern for the AI sector and, in particular, investors. The feedback from the participating investors on how to deal with this issue and the fact that most of them have not yet gathered any experience with sustainable investments was very enlightening. For several years now, this topic has dominated the public discussion, and the effects of ESG risks on portfolios can be dramatic. In this respect, the issue must be tackled with the highest priority by all those involved. However, the feedback from investors shows that not only the definition of one's own ESG strategy is regarded as one of the greatest challenges, but also the uncertainty resulting from possible future regulation. This is where politics and supervision are called upon to act wisely and unbureaucratically".
For a better understanding of ESG, the BAI invites fund managers and investors to a full-day ESG workshop on 26 September. BAI is thus making an important contribution to establishing sustainable investment across asset classes.
download the press release here
download the investor survey here (short version)
Bundesverband Alternative Investments e.V. (BAI)
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