Chief Investment Officer article “Which Alts are Best Positioned for the Return of Market Volatility?” covers NEPC’s latest Endowment & Foundation Survey Results and includes comments from NEPC’s Cathy Konicki.
When asked which alternative investments are best poised to benefit from the return of market volatility, half (49%) of the respondents of a new endowments and foundation survey by the investment firm NEPC believe hedge funds will generate the most returns, followed by private equity (17%), real estate or other real assets (13%), and commodities (12%).
“Hedge funds haven’t done well these last eight-plus years given the strong equity markets, but they should do well in more volatile markets,” Konicki told CIO.
Taking a longer-term focus of three to five years, more than half (59%) of respondents believe private equity will generate the greatest return, followed by hedge funds (15%), commodities (11%) and real estate and real assets (9%).
“Prices have gone up in real estate, so it is not as attractive as it has been,” said Cathy Konicki, partner in NEPC’s endowment and foundation practice, but investors are using it for its potential to hedge inflation hedge and for steady income.
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