Natixis AM survey: Challenge to balance short-term needs and long-term mandate
Institutional investors are facing increasing challenges to combine the short-term search for returns with their long-term mandate to meet future obligations, a Natixis Global Asset Management study revealed.
The research, conducted among 642 institutional investors with a combined AUM of $31trn (€24.91trn) highlighted that equities and alternatives continue to be seen as best performing assets in 2015.
While 80% of respondents say it is challenging to generate stable returns, 68 percent of investors expect it will be difficult to manage liabilities linked to increased longevity.
Key concerns for the long term outlook are geopolitical events (named by 17% of institutional investors), European economic problems (13%), slower growth in China (12%) and rising interest rates (11%).
On average, institutions expect they can earn yearly returns of 6.9 percent after inflation. They are likely to seek that return carefully in 2015: by a margin of 38 percent to 16 percent, investors say they plan to lower risk in their portfolios next year.
“Institutional investors have an enormous fiduciary responsibility to fund current goals and meet future obligations,” said John Hailer, president and CEO for Natixis Global Asset Management in the Americas and Asia.