Bogged down by worries about a global growth downturn, institutional investors plan to shift risks from public to private markets, according to a survey by American asset manager BlackRock.
The study, which polled 230 institutional clients across the globe holding $7 trillion in assets, found 51% of investors planning to lower their allocation to public equities this year. Last year, 35% of investors were found planning such reductions.
The trend is predominant in the US and Canada, where 68% were found planning to lower equity allocations.
Across the globe, 56% of investors believed that the possibility of the economic cycle turning is one of the most important macro risks influencing their asset allocation strategies.
Of those polled, 54% said that they plan to increase exposure to real assets.
Forty seven percent of investors said that they intend to increase private equity exposure, while 40% favoured real estate.
More investors displayed an interest in raising fixed income allocations in 2019 compared with previously.
BlackRock global head of institutional client business Edwin Conway said: “As the economic cycle turns, we believe that private markets can help clients navigate this more challenging environment.
“We have been emphasising the potential of alternatives to boost returns and improve diversification for some time, so we’re not surprised to see clients increasing allocations to illiquid assets, including private credit.”