The widespread push by institutional investors into real assets in recent years is likely to continue despite the disruption from the coronavirus pandemic this year, according to experts speaking at the IPE Real Assets & Infrastructure Global Investor Conference 2020.
Sabine Braad, senior director, global direct investments at Denmark’s largest pension fund ATP, said during a panel discussion at the virtual event: “There is no investment that won’t be impacted by the pandemic – but before that most investors were assuming we were late in the cycle and were adjusting their portfolios appropriately.
“I would expect to see more investment in this space, and I would be surprised if investors stopped doing this.”
Anish Butani, senior director of private markets at consultancy bfinance, pointed to the continuation of an underlying trend motivating investors to turn increasingly to assets such as real estate and infrastructure.
“The tailwinds are very strong as far as the hunt for yield for investors is concerned, as far as the case for diversification is concerned,” he said.
“I think a growing question is going to be: are all real assets going to remain real over the long term?”
Guy Lodewyckx, head of private markets multi-management at Amundi Asset Management, said it was the first time these assets had been through such a crisis.
“And as a matter of fact, these assets have done very well in this time,” he said. “It’s kind of a crash test for them and they have proven to be resilient, and to be somewhat uncorrelated with all other asset classes.”
In a keynote speech ahead of the panel session, Dominique Carrel-Billiard, Amundi’s global head of real and alternative assets, said real assets would be “the key in the revival of our economies struck by the COVID-19”.
Carrel-Billiard was speaking on the topic of the “rise of the real assets umbrella”, a metaphor for the broad investment platforms that have been built up in recent years by asset managers and large institutional investors to encompass most different types of real assets.
“The rise of the real assets umbrella is a well established and irreversible development in our industry,” he said.
Success in this asset class depended on resources, technology and scale, and in such a market, he argued that it was natural that there would be a push towards consolidation.
“This is why the industry leaders such as KKR, Blackstone, BlackRock, Amundi have all in recent years built real assets umbrellas mimicking that of their client base,” Carrel-Billiard said.
However, Butani said there were plenty of investors that continued to invest in very granular and specific ways in real estate and infrastructure.
“But there are increasingly more that will look at real assets from a top-down perspective,” he said. “There are also smaller investors that don’t necessary have the scale to invest in a granular perspective, and are just looking for a one-stop shop – that’s one route we see.”