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May 20, 2015 at 10:53 AM
Europe is now institutional investors’ number one foreign investment target — followed by Asia and Sub-Saharan Africa, according to a report from Armstrong International, a recruiting firm for financial executives.
Based on a survey of 305 North American institutional investors in the first quarter, Armstrong International found that four in five (78%) respondents were actively investing or planning to increase their allocations in Europe.
Of the remainder, three quarters said that they are actively considering European investments.
“This is a pivot point for Europe,” said Martin Armstrong, chairman of Armstrong International, in a statement. “We’ve never detected this level of positive sentiment on the part of North American institutional investors. It feels very much like a land grab. After a tepid decade, this level of investment enthusiasm implies that Europe is a re-emerging economy.”
With interest rates at historically low levels, U.S. equities hitting record highs and a strong U.S. dollar, Europe — and foreign markets in general — gives these investors an opportunity to add value to their portfolios.
“In an effort to find yield, North American institutional investors are expanding their investments into foreign markets and increasing their allocations to alternative investments,” the report states.
Armstrong International says that until quite recently the majority of North American institutional investors allocated approximately 10%-15% of their portfolios to alternative investments.
But Armstrong finds that is changing, especially in regard to foreign markets.
Eighty percent of the survey respondents reported that they were planning to increase their allocations to alternative investments outside North America, making foreign markets the fastest area of growth within institutional investors’ migration to alternatives.
