A quarter of European institutional investors expect to hire new alternatives manager in next year

Written by Adam Cadle

23/02/2023

One quarter of European institutional investors expect to hire a new manager for alternative asset classes in the next year, research from Coalition Greenwich has shown.

Alternative asset classes represent about 7% of institutional assets in Europe and allocations are expected to expand further in the months and years ahead. This same trend is seen in plans for new manager hiring as the share of institutions with plans to hire a new external manager for alternative asset classes increased from 9.5% in 2020 to 25% in 2022.

“Rarely in our research do we see such a large share of institutions in a region all planning to hire in unison,” Coalition Greenwich senior relationship manager Sophie Emler stated.

Around three-quarters of institutional investors in the region have integrated ESG criteria into their initial manager screens or into the preliminary due diligence process and are filtering out managers without a credible ESG strategy, or managers whose ESG policies and practices fall short of expectations.

The research also showed that relative to their peers across Europe, German institutions remain highly concerned about their ability to hit target rates of return and meet funding requirements. Approximately 45% of the German institutions cited rates of return and funding issues as a primary issue for the year ahead. Despite this difference in priorities, German institutions’ expectations plan to increase allocations to each of infrastructure debt and equity over the next three years. More than 35% plan to make meaningful increases to private debt allocations, and about a third plan to expand allocations to private equity.

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