Wednesday, July 26, 2017 Stamford, CT USA — European institutions contending with sweeping regulatory reforms, persistently low interest rates and the threat of increased volatility are turning to asset management firms for advice and assistance on these critical issues. That demand for support is giving a boost to pan-European, multi-asset-class managers like Allianz Global Investors—the 2017 Greenwich Quality Leader in Overall Continental European Institutional Investment Management. 

Allianz Global Investors and other large asset managers are benefiting from requests for assistance on several issues rated as top-of-mind by the investment professionals participating in the annual Greenwich Associates study. The related tasks of complying with new rules and putting in place risk management strategies to protect their portfolios against volatility has consumed significant time and attention for senior leadership of Europe’s institutions. 

“By 2017 many of Europe’s largest institutions had made enough progress in these areas to focus on their next pressing issue: diversifying their portfolios to find new sources of investment returns in an era of historically low interest rates,” says Greenwich Associates Managing Director  Markus Ohlig. 

Institutions Shift Assets to Specialty Strategies

Institutions are finding opportunities to shift assets into “higher octane” asset classes. While those asset classes include equities and real assets, many of the biggest shifts are occurring within fixed-income portfolios, where institutions are moving from domestic and European government bonds into “specialty” strategies such as high-yield bonds and emerging markets debt. Assets are expected to continue flowing into these specialist fixed-income categories, as well as into private equity, infrastructure and real estate.

As institutions diversify away from domestic and European government bonds, they are moving further from the comfort area of internal investment professionals. The share of European institutions describing themselves as “expert and well resourced” to manage their investments has been declining for the past two years. Meanwhile, the share of institutions saying they are reliant on external advice climbed over the past 12 months.