BlackRock Study: Non-Profit Investors Still Taking on Risk Despite Headwinds
01 Setembro 2022 - 10:00AM
Business Wire
In uncertain markets, endowments,
foundations and healthcare investors are still committed to private
equity
More than half (53%) of non-profit institutional investors are
increasing allocations to private equity as a means of generating
much-needed returns amid volatile markets and mounting macro
risks.
From elevated inflation to the outbreak of the war in Ukraine
and a painful global selloff, 2022 has presented endowments,
foundations and healthcare investors with a series of challenging
market and macroeconomic conditions. To understand how these
investors are approaching the current investment landscape,
BlackRock collaborated with Coalition Greenwich to conduct a
research study of U.S. endowments, foundations and healthcare
investors between early February and late March 2022.
“In 2022, mitigating macroeconomic risk has been a top priority
for non-profit investors – even more so than interest rate risk,”
says Lili Forouraghi, CFA, Head of U.S. Endowments and
Foundations, BlackRock. “We’ve been working closely with
clients who are increasingly looking to implement more diversified
private assets into their asset allocation programs while managing
costs.”
Investors cited inflation, rising interest rates and drawdown
risks as primary risk factors. Russia’s invasion of Ukraine
amplified these macro concerns. The portion of survey participants
who said mitigating inflation was a top investment objective rose
by 11 percentage points after the invasion, while the percentage
calling rising rates an important investment concern increased by
eight points. As the investors position their portfolios for these
risks, they favor real estate, public equities, inflation-indexed
bonds and natural resources to address inflation, and value stocks,
real estate and floating-rate debt to position for rising
rates.
Retaining a Risk-On View The conflict in Ukraine also
heightened concerns about the potential for outsized losses.
However, fears of major drawdown have not caused these investors to
abandon risk. Despite worries about the macro environment, almost
half of investors remain focused on generating idiosyncratic
returns and maintaining a risk-on view. Private equity is the
alternative asset class of choice for more than three-quarters of
study participants, and more than half are increasing allocations
to private equity to support a risk-on view. Almost one-third
indicated an intention to increase their private equity allocations
by up to 10%, and nearly one-fifth are looking to boost exposure
between 10% and 20%.
Nonprofits Prefer ESG Integration Over Exclusionary
Screens For non-profit institutions who have adopted
environmental, social and governance (ESG) standards or goals in
their portfolios, a majority (more than three-quarters) prefer to
incorporate ESG factors into their overall investment process,
while using negative or exclusionary ESG screening was the
least-popular approach.
ESG adoption has gained traction across the non-profit segment,
with roughly half (49%) of non-profit institutions adopting ESG
standards or goals in their portfolios, but some investors are
reserving judgment. One-quarter of the investors not currently
employing ESG indicated that they plan to adopt responsible
investing practices within the next five years. However, four in 10
respondents are not planning to integrate ESG, citing challenges
with implementation and incorporation. About another 40% of non-ESG
investors remain unsure whether they will implement ESG in the next
five years.
Survey methodology BlackRock partnered with Coalition
Greenwich to conduct a research survey of endowments, foundations
and healthcare systems investment priorities. A total of 87
U.S.-based investors — 31 endowments, 31 foundations and 25
healthcare systems — completed a 38-question online survey over a
ten-week period from February 7, 2022. The online survey was
complemented by in-depth phone interviews with CIOs and senior
decision-makers at six institutions: a private university
endowment, a public university endowment, two foundations and two
healthcare systems.
About BlackRock BlackRock’s purpose is to help more and
more people experience financial well-being. As a fiduciary to
investors and a leading provider of financial technology, we help
millions of people build savings that serve them throughout their
lives by making investing easier and more affordable. For
additional information on BlackRock, please visit
www.blackrock.com/corporate | Twitter: @blackrock | LinkedIn:
www.linkedin.com/company/blackrock
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Media:
Thomasin Bentley Email: thomasin.bentley@blackrock.com
Phone: (646) 231-1769
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