91% of institutional investors increase allocation to structured credit investments

Written by Adam Cadle

02/02/2022

Ninety-one per cent of institutional investors have increased their allocation to structured credit investments across different asset classes over the past 18 months, and are likely to continue to do so in the next 18 months particularly in commercial real estate, new research has shown.

The research from Aeon Investments showed that 85-90% of institutional investors are looking to target commercial real estate. The corresponding figures for structured credit investment vehicles concerning residential real estate, specialist areas of corporate finance and consumer credit are 65%, 75% and 73% respectively.

Eighty-seven per cent of institutional investors believe in addition to yield, structured credit products provide the potential to improve risk-adjusted returns and serve as an important diversification tool.

Aeon Investments chief executive officer Oumar Diallo said: ““The structured credit market has been enjoying strong growth relative to traditional fixed income assets as central banks begin to tighten monetary policy. The resulting outperformance, improving regulatory environment, and increased transparency means structured credit will likely continue to attract asset allocations. Like most respondents, we remain bullish over the medium term and expect structured credit to continue to outperform, particularly in commercial real estate and corporate credit.”

Aeon Investments commissioned the market research company Pureprofile to interview 100 institutional investors across the US, UK, Switzerland, Sweden, Norway, The Netherlands, Germany, Finland, and Denmark. The survey was conducted online in October 2021.

Related Articles