Institutional investors in Asia are looking to rebalance their portfolios in light of inflationary pressures, according to recently published research.
The latest report from consultant Cerulli Associates, Institutional Asset Management in Asia 2022: Opportunities in a Changing Landscape, states that new mandates are emerging in the second half of 2022 after a period of risk aversion.
The changes also came after a successful 2021 for Asia institutional assets, which grew by 6.3% in value to US$21.2 trillion.
However, rising inflation has led to a change in investors’ demand and a reversion to “strategic asset allocations” as year-end portfolio evaluations loom large, states the report.
The growth of assets and demands for new allocations have also led to a need for more external manager expertise in multiple investment areas, states Cerulli.
“On the back of increasing assets, diversification needs are becoming more acute in Asian institutional portfolios,” said Soo Ah Ran Cho, associate director with Cerulli.
“As Asian institutional portfolios still have high allocations to local debts, the need for foreign partnerships and investment into overseas assets are expected to increase in the coming years.”
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