59% of survey participants say low expected future returns are their number one challenge over the next three years
65% of respondents see diversifying away from traditional asset classes as their greatest opportunity over the next three years
55% of survey participants say they're using external expertise to help navigate this complexity
39% of survey participants believe meeting their ESG investing goals means compromising on returns
Actions investors can take
Low expected future returns (59%) and inflation (50%) identified as the top 2 investment challenges for not for profits over the next 3 years.
- Review how the assets in your portfolio are likely to perform in a period of sustained high inflation. Which asset classes offer protection against inflation?
- Consider assets likely to perform well in an environment of rising rates as central banks act to counter inflation
65% of respondents see diversifying away from traditional asset classes as their greatest opportunity over the next three years.
- Decide what you’re trying to achieve and what you need your allocation to private markets to do for your portfolio
- Use experts to identify asset classes, develop a clear commitment plan and ensure appropriate sizing
44% of respondents say their portfolios are more complex today than they were three years ago.
- Consider additional governance models (outsourcing, extension of staff etc) to ensure effective sourcing, assessment and execution which complement in-house skills
- Regularly review your provider to ensure that they best placed to meet your changing needs
72% of respondents state an intention to increase or significantly increase their exposure to ESG-focused investments over the next 12 months. However 39% believe they have to make compromises on their investment objectives, and, of that group 57% believe they will have to compromise on absolute return.
- Develop a clear policy for all of your organisation’s stakeholders covering responsible investing that covers issues such as mission alignment; diversity, equity & inclusion; and climate risk
- If you want to make a positive impact, move beyond exclusions toward thematic or impact strategies with measurable stewardship and engagement outcomes