14/04/20

ALTERNATIVE INVESTMENTS: Nearly half of alts investors expect pandemic to disrupt activity for 3 to 6 months.

As published on pionline.com, Monday 13 April, 2020.

A large portion of alternative investment investors, 44%, expect the COVID-19 pandemic to disrupt their investment activity or plans for three to six months, according to survey results released Monday by placement agency Eaton Partners, a Stifel company.

Eaton Partners conducted the survey between April 2 and April 7. There were 107 survey respondents, spokesman Jeff Preis said in an email.

Another 22% of survey respondents expect the crisis to be a disruption for six to nine months. Sixty-seven percent expect a U-shaped recession; 19%, L-shaped; 13%, V-shaped; and 1%, no recession.

While 64% are not making changes to their alternative investment allocations, 18% are cutting allocations modestly and 3% are cutting allocations significantly. Fourteen percent are increasing allocations modestly, and 1% are making significant allocation increases.

Thirty-nine percent of respondents indicated that private equity looked like the most appealing alternative investment sector right now, while 30% said private credit. Meanwhile, 33% indicated that infrastructure is the alternative asset classes they feel offers the strongest uncorrelated returns to the public equity markets, with 22% saying life settlements, 19% litigation finance and 13% royalties.

The majority, 84%, do not plan to reduce or pull investments from certain geographic regions due to the novel coronavirus pandemic.