FT/Willis Towers Watson Global Alternatives Survey 2016

In early July, Willis Towers Watson (a global investment consultancy firm) published their latest Global Alternatives Survey. The survey found that “alternative investments grow on flight from bonds and equities”, with continued high demand for private debt (“more specialist strategies will attract greater interest”), and with demand from institutional investors for ILS remaining regardless of premiums. The survey also noted that ILS funds targeting more remote and lower risk events are likely to continue to generate an attractive risk-reward ratio.

Commenting on the findings, John Butler, Head of Investment Management at Twelve Capital, said, “The survey echoes our belief in the attractiveness of more specialist strategies within illiquid credit and insurance-linked investments.“

Furthermore, the accompanying FT article notes that despite the rise in allocations to alternative investments, there are concerns that the accompanying risks should be understood and aligned appropriately. James Ray, Head of Consultant Relations at Twelve Capital added “Willis Towers Watson are right to flag up the need for investors to put alternative managers under greater scrutiny before making allocations. We believe there are still solutions for those who are searching for yield but who wish to retain liquidity and may be wary about exposure to riskier (and possibly costlier) alternative investments. Notably, fixed income mandates could look at the higher yields issued by European insurance companies compared to corporate bonds.”

Monday, 11 July 2016