Asian IPOs, core retail real estate and natural resource investments are the most favoured by the world’s sovereign wealth funds for the next three months, according to a ‘consensus demand meter’ produced by the Sovereign Wealth Fund Institute in the US.
The institute ranks 13 asset classes and types of investment on a scale of one to 10 for the demand that sovereign funds are likely to have for them in the next three months; in this case, October through December.
The levels of demand are estimated from a range of sources, including public statements, market and economic research, internal sources and interviews with executives. A score of 10 indicates the area is attractive for the majority or a large portion of sovereign funds. A score of one indicates the funds are likely to lower their exposures.
The top-rating investment area for funds looking forward from September was Asian IPOs, with a score of nine, followed by core retail real estate and natural resources, both with eight. Real estate secondaries funds came in fourth, with a score of seven, indicating possibly that there was still evidence of distressed selling opportunities in the sector.
Mirroring its popularity among individual investors, for once, was gold, which had a score of six, which would be a marked difference from the normal views one could expect from pension funds of a similar size.
The least popular investments going forward were European equities and Greek sovereign debt, both with a score of two, followed by agricultural land, private real estate debt and cash, each with a score of three.
