“Toto, I have a feeling we’re not in Kansas anymore,” said Dorothy Gale when she took her first steps out of her tornado-strewn house into the strange and wonderful land of Oz. While not as extreme as going from black and white to technicolor, many institutional investors are finding themselves in a similar state of awe, wondering what’s safe and what’s not in their immediate environment and their long-term investment strategy.
This past pandemic-stricken year has given rise to a plethora of factors that have the potential to severely impact the health of institutional investment portfolios. Economic recessions, infectious diseases and job insecurity and unemployment are the top factors, with the recession the most common influencer noted across all institutional asset sizes and categories. Persistent low interest rates, increasing inflation and international trade relations also play a role, affecting the future health of the organizations themselves, let alone their investment portfolios.
The timing of this year’s data collection for our US Institutional Investor Brandscape report coincided not only with the ongoing COVID-19 pandemic but also with the contentious US presidential election. While adjustments to portfolio holdings, particularly to meet the increasing need for liquidity, were deemed necessary during the pandemic, the majority of pensions and non-profits did not change their investment allocations in anticipation of or in response to the election. Many consultants and advisors consciously chose not to let the election affect their investment decisions, affirming the resistance to knee-jerk reactions by institutional investors that hold steadfast to a longer-term view.
With this tumultuous and unprecedented year behind us, we present wrote our annual review of the US institutional market, providing a comprehensive view of key trends among investors managing defined benefit pensions, endowments, foundations and tax-exempt organizations. In the report, we offer a unique view of the competitive environment through an in-depth exploration of the perceptions of and experience with the 50 leading institutional asset management firms. Through a detailed analysis of the perceptions and behaviors of institutional investors, we identify important shifts in attitudes and approaches that are likely to shape the course of the market for years to come.
I shared more insights and data from the report during a complimentary webinar. Click below to watch the replay!