The survey questioned a collection of the largest fund managers and found that, as of December 31, 2010, almost all managers of alternative investments experienced growth in assets. Several categories of alternative assets performed particularly well – with commodities up by 91 per cent, infrastructure investments up by 27 per cent and real estate trusts rising by 22 per cent.
Some managers who saw drops in their investments in energy and equity real estates, for example, saw improvements this year, with returns increasing by 27 per cent and 2 per cent respectively.
“The great thing about alternative investments is that they can rise when traditional assets are falling,” explained AAA’s analyst partner and fund management expert, Anthony Johnson.
“Commodities are very popular as they are highly liquid. This also makes them volatile, but if you are willing to sit it out, you can see investments rise by huge amounts in a single year,” he explained.
AAA encourages investment in alternative assets, such as real estate, private equity and more ethical projects, such as forestry in emerging economies. “There are several firms, such as Greenwood Management and Robinia, which have started offering people the chance to invest in tangible forested land in markets like Brazil,” explained Johnson. He continued: “These investment opportunities have proven hugely popular with individuals and fund managers alike as they are less risky than traditional investments and offer an ethical investment opportunity with the added bonus of healthy returns.”
More and more individuals are calling upon their fund managers to provide them with more risk averse portfolios in light of continuing uncertainties about the future of the global economy. The news that alternative assets are performing well will likely result in an even greater interest in alternatives this year – from larger and larger funds, claimed AAA.
“We have already seen a number of pension funds come forward for alternative investments in the earlier part of 2011 and it is likely more will emerge from the woodwork looking to diversity their portfolios in the coming months,” added Johnson.
Alternative Asset Analysis
71 Commercial St
Boston, MA 02109-1320
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