The EQuilibrium 2024 Global Institutional Investor Survey, the results of which were released on Thursday, is Nuveen’s fourth. It covers corporate and government pensions, insurers, endowments and foundations, superannuation funds, sovereign wealth funds, and central banks.
Investment decision-makers surveyed each represented organisations with at least US$500 million in assets, and the 800 surveyed represented US$18 trillion of assets.
These investors reflected a higher-than-normal level of uncertainty about four key market drivers: geopolitics, capital markets, economic growth, and monetary and fiscal policy.
“Over the last 10 years, everything was so well-behaved. Inflation was low, growth was neither too hot nor too weak, there were no concerns around China, and there was no such thing as net zero,” said one chief investment officer at a UK pension fund in response to the survey.
“Now, all those things have been turned on their head. Everything that was looking good in terms of consideration now has a question mark. So it makes our life quite difficult, in terms of how we bring it all together.”
To improve portfolio resiliency, 22 per cent of investors said they are diversifying into more asset classes.
The top asset class for diversification was fixed income and debt instruments.
Investment-grade fixed income was the most-favoured investment within the fixed-income segment, with 48 per cent saying they would increase their allocations there over the next two years.
Private fixed income – including direct lending, private securitised debt and private real estate – came in second, with 38 per cent planning increased allocations there.
Drilling down further, the three most-favoured private fixed-income allocations were private investment-grade corporate credit, private infrastructure debt, and private real estate debt.
