The 3rd Altinvestor APAC event is back in Singapore to bring together family offices as well as institutional asset owners to discuss alternative investments. As a closed-door event, the two-day forum will provide exclusive alternative investment insights and perspectives shared by leading APAC investors along with selected global investors.
Altinvestor APAC 2018 is an asset owners’ event dominated by attendees such as family offices, pension funds, sovereign wealth funds, insurance companies, foundations and endowments. The event operates in accordance with the Chatham House Rule and therefore, the source of information, insights and perspectives shared at the event will remain anonymous and will not be publicised.
The event also provides the opportunity for a select few investment managers to take part based on interests from attendees in meeting external managers specialising in various alternative assets.
Highlights from the 2nd Altinvestor APAC 2018 conference – 19-20 April 2018, Conrad Hong Kong
The 2nd Altinvestor APAC conference in Hong Kong hosted asset owners who were prominent sovereign wealth funds, private and public pension funds, insurance companies as well as single and multi-family offices primarily from Asia Pacific and a select few from around the globe. Speakers and attendees were all asset owners while 12 alternative asset managers from private equity and hedge fund space were featured at the conference based on attendees’ interests.
The two day event featured presentations, panel discussions and roundtable discussions between asset owners as well as networking sessions between asset owners and the featured alternative asset managers as they shared and discussed ideas pertaining to their portfolio allocations across the breadth of the alternatives space.
Some key observations from the event are summarised as follows:
- Investors across the board are increasing their allocations towards alternatives – downside protection is being increasingly sought after in what are expected to be choppy market conditions going forward. Insurance companies as a group are seeing the largest increase in allocations towards alternatives; favouring real-estate, infrastructure and illiquid credit/private debt.
- Illiquid credit/private debt portfolios are biased in favour of developed markets, with investors citing a dearth of good opportunities in Asia ex Australia where a sufficient premium does not exist to counteract any downside move. Further, investors felt that the downside protection in-built into illiquid credit is absent or hard to realize in Asian markets – it was felt a direct equity exposure play on emerging markets was preferred as it offered substantial upside as well. Despite the challenge in sourcing good private debt deals in Asia, investors are actively spanning this space and in anticipation of an end to the credit up-cycle were moving into higher quality credit and shorter tenors.
- Alternative Risk Premia investing continues to come to the fore in analysing and dissecting hedge fund returns and reducing the cost per unit of alternative beta. In comparison to Scandinavian and other European institutional investors, alternative risk premia application in Asia are still in the nascent stages though some large sovereign wealth funds and pension funds are looking at it increasingly and building in-house expertise. Investors are keen to see how alternative risk premia portfolios perform in real time, with some expressing concerns over the costs inherent in the total return swap structure which is commonly used to construct alternative risk premia portfolios.
- On the family office side, the conversation centred on focusing away from alternatives such as real estate which families traditionally have high exposure to begin with in Asia, towards other asset classes such as private equity and hedge funds. For multi-family offices, it was felt that there was a greater need to educate clients about the inherent illiquidity arising from exposure to private equity which may at times lead to a liquidity mismatch. Investors also underlined the increasingly expensive opportunities available in the PE space which they felt were putting a squeeze on the historical premia earned in excess of public equity markets.
- The Insurance Linked Securities (ILS) market is starting to see a turnaround following a difficult market environment in 2017 which saw multiple catastrophic events that led to losses for the sector. Premiums are beginning to gradually climb higher and the retrocession space is looking ripe with opportunities.
- Crypto-asset funds are also vying for increasing investor attention as block-chain continues to march mainstream. Both family offices and institutional investors expressed cautious interest around this sector, ranging from venture capital opportunities in the block-chain space to direct investment investments in crypto assets.
View highlights from Altinvestor APAC 2017: