Insurers and pension funds in UK and Continental Europe set to significantly increase allocation to alternative income assets

Institutional investors in the UK and Continental Europe are boosting allocations to alternative income assets, such as infrastructure debt and equity, structured finance, real estate finance and private corporate debt, in the pursuit of stronger risk-adjusted returns and diversification, according to new research from Aviva Investors.

The study, which surveyed over 250 pension schemes and insurers in the UK and Europe, showed UK pension funds are planning the largest increase in allocations to alternative income, bringing their exposure closer in line with insurers in the UK, and pension funds and insurers in Continental Europe.

Mark Versey, Chief Investment Officer, Real Assets, Aviva Investors, said:

“The appeal of the alternative income sector has grown significantly among European pension schemes and insurers over the past decade. Institutional investors have been lured by the illiquidity premium provided by private assets, as well as other benefits such as diversification and downside protection.

“As the era of quantitative easing finally winds down and interest rates rise, the survey highlights that investors are venturing into new sectors and geographies. This has also been borne out in our conversations with clients.”

Download a copy of the full study to find out more.

1 The research, commissioned by Aviva Investors, was conducted by Longitude Research.