Where will institutional investors go next?
The combination of inflation rising across the globe to levels not seen in decades, choppy equity and credit markets, and geopolitical tensions has made 2022 a difficult environment for investors to navigate and has created considerable uncertainty about the future. Against this backdrop, Societe Generale’s Capital Consulting team recently conducted a global survey of the institutional investor community to better understand current market trends. Over 300 respondents completed the survey representing 250 different institutional investment firms around the globe.
Plans to up Global Macro strategy allocations
The survey found that more than 50 percent of the investors surveyed said they planned to increase allocations to discretionary global macro strategies in the coming year. Commodities and multi-strategy allocations came in close behind. The survey clearly indicates that equity strategies are currently in favor, with equity market neutral, long only equity, and equity long/short strategies garnering meaningful interest for the coming year.
Sustained ESG investment
The survey results also confirm that ESG considerations are becoming increasingly important for many institutional investors globally. Nearly half (46% percent) of global respondents either plan to make an initial ESG investment in the next 12 months or have already done so. Broken down by region, more than half of investors from the Europe, Middle East, and Africa (EMEA) stated they planned to or have already made an ESG investment, followed by Asia Pacific (APAC) and the Americas regions, with 42 percent and 41 percent, respectively.
Of those respondents planning to make or continue ESG allocations, more than 25 percent expressed interest in all ESG strategies. For investors taking a more targeted approach, the most popular strategies were thematically focused on energy: carbon, climate, and energy transition.
Diversity & Inclusion (D&I) initiatives also are a focus of investors when seeking new allocations, with 30 percent of all investors surveyed currently having active mandates in this area. The Americas region led the globe with 35 percent of respondents seeking mandated allocations, followed by the EMEA region with 28 percent and the APAC region with 15 percent.
To inquire about the survey, please contact your Societe Generale representative or email the Capital Consulting team firstname.lastname@example.org.
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