The majority of investors intend to increasingly allocate to alternatives in the face of the current economic climate, according to a Time Investments survey.
The research took in responses from 200 UK wealth managers, financial advisers, discretionary fund managers, fund selectors and investment analysts.
Time found that 78% of respondents expect to increase allocation to alternatives over the next 12 months.
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However, the research found that there are still challenges to increasing allocations, including investment strategy choice, limited knowledge of the alts market and a lack of expert alternatives fund managers.
Some 60% of respondents said investment strategy was a key factor in selecting an alternatives fund manager, while 47% placed emphasis on expertise across asset classes and regions. 43% highlighted an ESG approach as an important factor.
In terms of client portfolios, 26% of respondents are currently targeting a 16-20% allocation to alternatives, while 35% are targeting 11-15%. Meanwhile, 29% are currently targeting an alternatives allocation in the 6-10% range.
Henny Dovland, business development director at Time Investments said: “Our research shows that wealth managers, advisers and investment professionals are already allocating significant proportions of client portfolios to alternative investments, with targets set to increase.
“This is largely driven by the prevailing economic conditions and more conventional asset classes such as equities proving highly volatile. Alternatives provide diversification and attractive yields as investors seek to weather the storm.”
