Greenwich: European institutions keen on alternatives

European institutions are to shift more money into private equity and hedge funds, according to a report released by Connecticut-based financial research firm Greenwich Associates.

The report said many European investors expected to increase their investment in alternatives, citing private equity, property and hedge funds. However, allocations to these did not increase between 2004 and 2005, showing this eagerness has not yet been met with action.

Greenwich consultant Tobias Miarka said: “Although allocations haven’t budged, European institutions remain bullish on alternatives – at least in theory. In private equity and hedge funds, 41% of continental Europe’s institutions expect their allocations to increase by 2009, while only 1% expect them to decline.” The consultancy believes this feeling is part of a change from the more traditional industry practices of the past 50 years.

The report also claims the diversification in investment portfolios is contributing to a European hiring boom in external managers.