Trends
The fourth quarter had 35 completed investment consultant hires, according to FIN Searches data.
Industry strategists see investment opportunities outside of the U.S. in emerging markets, but risks, such as China and its slow growth, pose challenges that institutions should be mindful about, according to a recent webinar.
Nonprofits still see opportunities in alternative asset classes, like smaller or specialized buyout strategies, venture funds or private debt strategies that benefit from macro trends like the higher interest rates, rapid development of artificial intelligence or transition to clean energy.
As U.S. professionally managed assets declined in 2022, Cerulli Associates’ latest report found a temporary trend reversal where institutional channel assets gained a slight edge over retail.
2023 was supposed to be a down year for foundations and endowments with a potentially recessionary environment, however, equity and bond returns came out in the green, thanks in part to strong fourth quarters, leaving investors and allocators with a more optimistic outlook for their portfolios entering 2024.
Regardless of whether inflation continues to slow or the global economy steers clear of a recession, endowments and foundations should not base portfolio construction on market timing but instead focus on longer-term areas of opportunity like private equity and international equities, according to one consulting firm.
Institutional investors have become increasingly attracted to opportunistic and special situations investments across the broad real estate and credit sectors due to interest rate hikes and capital market dislocation, which the industry finds will likely continue into 2024.
The consultant believes adding diverse-owned firms is not the only way nonprofits can achieve their DEI-related investment goals, and their consultants should assist them to evaluate several different approaches.
Artificial intelligence could be a boon for emerging or diverse-owned investment managers, though the trend carries some risks, according to the firm.
This article is the second part of a two-part series from Meketa Investment Group executives examining active allocation strategies tailored to today’s market.
