Insurance Asset Managers Have High Expectations for PE in 2014


May 22, 2014

Insurers are highly optimistic about private equity returns over the next 12 months, and continue to believe equity asset classes will outperform fixed income assets, according to the latest Goldman Sachs Asset Management Survey of 233 Chief Investment Officers (CIOs) and Chief Financial Officers (CFOs) representing insurers with over USD 6 trillion in global balance sheet assets.


The survey, which is considered an industry bellwether, revealed that a large proportion expect private equity (26%) to deliver the highest returns in the coming year. The second most favored asset class in the ranking is US equities (17%), followed by European equities (13%). CFOs expressed greater optimism than CIOs, as 31% believe investment opportunities are improving, and only 29% believe they are getting worse.


Risk is mainly perceived as a result of credit and equity market volatility. The results of the survey show that insurers are focused on the search for returns. They view corporate bonds and public equities as either overvalued or fairly valued; as a result, they are more willing to seek non-traditional asset classes that can offer higher total return potential and compensation in exchange for illiquidity. (Image source: Insurance Insider)

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