Insurers are looking to less liquid private asset classes to bolster returns, and intend to increase allocations to commercial mortgage loans, infrastructure debt, private equity, middle market loans and real estate equity, according to the latest Goldman Sachs Asset Management (GSAM) annual insurance survey, which has the title “Too Much Capital, Too Little Return”.
It is worthwhile to consider this research here because insurers are big alternative asset investors, and private equity is more of a focus for this group of LPs going forward. The report said that faced with negative yields, tight spreads, and high equity prices, insurers demonstrated the greatest amount of pessimism since GSAM began conducting the survey four years ago. Insurers are concentrating on finding new investment opportunities. Overall, they believe equity asset classes will outperform credit assets. (Image source: GSAM)