NEWYORK, March 30, 2016 — OFI Global Asset Management, an OppenheimerFunds company, and Pensions & Investments today published “Institutional Investors: Shared Expectations, Divergent Paths,” a comprehensive study of the attitudes and practices of today’s institutional investors. The survey of 240 institutions represents endowments and foundations, sponsors of corporate and public defined benefit pension plans, and sponsors of defined contribution pension plans.
The survey focused on four main institutional investing topics: macro concerns; asset allocation; investments; and adoption of environmental, social, and governance (ESG) principles. The research reveals that although institutional investors in general are worried about the same investment issues and have similar financial market outlooks, they are facing a diverse set of challenges.
“This survey is the starting point of what we hope will be an engaging conversation with clients and consultants on how they are structuring investment solutions to meet investment return objectives and manage risk in today’s market environment,” said Steven Paddon, Head of Institutional & International at OFI Global Asset Management.
The study shows that the current low-yield environment is one of the most pressing concerns of institutional investors, who expect low yields to persist for a decade or more despite the Federal Reserve’s rate increase in December 2015. Respondents expressed heightened sensitivity to volatility as well as increasing concern about achieving their long-term return targets, which raises important questions about specific ways in which institutional investors may seek to take on additional risk despite concerns about volatility. The firm will seek to pursue these questions with institutional investors and consultants in one-on-one meetings as well as larger forums on April 19 and 21, 2016, in Chicago and New York, respectively.
OppenheimerFunds’ larger strategy for expanding its capabilities for and engagement with institutional investors is already underway and reflected in numerous initiatives and activities. The organization has been pursuing more strategic engagement with key institutional consulting firms. In addition, Cynthia Lo Bessette was appointed General Counsel; she joined the firm in March 2015 from Jennison Associates, an asset management affiliate of Prudential Financial, to lend institutional experience and knowledge to the firm’s senior leadership.
“We were delighted to partner with OFI Global Asset Management to study the strategies that institutional investors are pursuing to meet their goals,” said Greg Crawford, Director of Content Solutions at Pensions & Investments. “We hope this report will prompt further dialogue within the institutional investment community.”
“This study reveals a natural alignment between what OppenheimerFunds and institutional investors believe is the right way to invest,” said Art Steinmetz, Chairman and CEO of OppenheimerFunds. “With more than 50 years of long-term, global investing, our approach across traditional and alternative asset classes puts us in a unique position to serve the evolving needs and challenges of institutions.”
The survey respondents represent 240 institutions headquartered in the United States and Canada, and the research was conducted in October 2015. To learn more, visit ofiglobal.com/sharedexpectations.
Alternative asset classes may be volatile and are subject to liquidity risk.
Foreign investments may be volatile and involve additional expenses and special risks, including currency fluctuations, foreign taxes, regulatory and geopolitical risks.
OFI Global Asset Management (“OFI Global”) consists of OppenheimerFunds, Inc. and certain of its advisory subsidiaries, including OFI Global Asset Management, Inc., OFI Global Institutional, Inc., OFI SteelPath, Inc. and OFI Global Trust Company. The firm offers a full range of investment solutions across equity, fixed income and alternative asset classes. The views herein represent the opinions of OFI Global and are subject to change based on subsequent developments. They are not intended as investment advice or to predict or depict the performance of any investment. The material contained herein is not intended to provide, and should not be relied on for, investment, accounting, legal or tax advice. Further, this material does not constitute a recommendation to buy, sell, or hold any security. No offer or solicitation for the sale of any security or financial instrument is made hereby.