Perception A: Illiquid assets move up the investment agenda
More than three-quarters (78%) of institutional investors and wealth managers will increase allocations to illiquid assets over the next five years with 10% making dramatic increases, new research from international asset management company Managing Partners Group (MPG) reveals.
Its survey of global institutional investors and wealth managers holding assets of €107 billion under management, finds that 10% of respondents will cut allocations to illiquid assets in the next five years. Just over one in ten (11%) of those surveyed will keep allocations the same.
Current allocations to illiquid assets for those investors surveyed were typically between 11% and 25%, with 60% of respondents falling into this range. Around one in six (16%) say they invest between 25% and 50% of their portfolios in illiquid assets while just under a quarter (24%) of investors have up to 10% dedicated to illiquids.
When asked what level of additional premium is required to invest in illiquid assets, the majority (51%) of investors say they need 1.5% to 2% per annum. Just under a fifth (18%) say between 2% and 2.5% a year and the same number require 1% to 1.5%. Around one in seven (13%) say the illiquidity premium required is 0.5% to 1% per annum.