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Global State Investors shifting into Real Estate & Infrastructure Projects

Omfif surveyed 500 big public sector institutions with total assets of $29.7tn (9.1% in real estate and infrastructure) found that, in an environment of ultra-low interest rates and negative yields, they plan to shift significant funds into real estate and infrastructure projects over the next three to five years to boost returns.

Omfif's surveyed showed:

  • 44% of its top 500 ranked institutions said they would increase their allocations to real estate and infrastructure in the next three to five years.
  • 50% planned no change.
  • 6% expected a reduction.

The survey also showed a positive balance of global public investors expecting to increase their allocations to fixed income assets. But just 9 per cent saying they would increase their allocation to the hedge fund sector.

The drive into real estate and infrastructure has been led by sovereign wealth funds, such as Norway's oil Fund, and public pension funds.

China's central bank, which manages a significant chunk of China's 3.8tn of foreign exchange reserves, is also considering the move into the sector.

Reference

Financial Times, Ralph Atkins & Claire Jones, 2015-05-20, "Global State Investors Shift into Property"