© Reuters.
LONDON (Reuters) – International public pension schemes and sovereign wealth funds managing greater than $3 trillion in belongings concern a mix of financial slowdown and better inflation within the subsequent 12-24 months, a survey confirmed on Tuesday.
The buyers face enormous challenges in switching their portfolios to manage, in accordance with suppose tank OMFIF, which carried out the survey of 19 funds throughout Europe, North America, the Center East, Asia Pacific and Latin America.
Persistently excessive inflation was the highest long-term concern of virtually 50% of these surveyed.
In a hunt for yield, greater than 40% of the funds plan to allocate extra to actual property and infrastructure, whereas they’re additionally trying to hedge their positions by investing extra in inflation-linked authorities bonds.
The buyers are additionally trying to reallocate away from China’s renminbi (yuan), citing points round geopolitics, market transparency, regulation and capital controls.
Local weather change is one other concern with over 80% of respondents saying they deliberate to speculate extra in renewable industries.
Nonetheless, public pension funds’ belongings grew final yr, giving them some cushion in opposition to market volatility.
Belongings below administration within the prime 100 public pension funds grew by 17% in 2021 to $17.4 trillion, OMFIF mentioned. Belongings of the highest 50 sovereign wealth funds rose 23% to $9.8 trillion.
OMFIF carried out the survey between August and October 2022.
