Low returns prompt alternative investment plan

Alternative investments are becoming more appealing as an asset class in a low-return world.

The low global interest rate environment has elevated alternative investments as a potentially attractive asset class for fund managers seeking higher returns.

This has prompted Griffith Business Schoolto bring together a group of elite professionals and researchers from around the world to share the latest knowledge in this emerging sector.

The Griffith Centre for Personal Finance and Superannuation (GCPFS) is hosting the inaugural Alternative Investments Conferenceon the Gold Coast in November.

The international conference will be attended by practitioners, academics, professionals and regulatory agencies involved in the finance industry to share ideas and explore new opportunities in the sector.

An OECD reportreleased earlier this year shows the largest pension/superannuation funds around the world are increasing their allocations to alternative investments.

The asset allocation of pension funds to alternative investments increased from 14.3 per cent of total assets in 2010 to 15.3 per cent in 2014. The increase in investment towards alternatives is expected to grow in the future.

Assessing risks and rewards

However, Griffith Business School’s Associate Professor Robert Bianchi, the conference director, said that while alternative investments are becoming increasingly attractive to mainstream fund managers, more research is needed to assess the risks and rewards.

“Alternative investments have become a catch-all phrase to describe a variety of assets and investments, such as infrastructure, commodities, hedge funds, private equity, venture capital and renewable energy markets,” Associate Professor Bianchi said.

Associate Professor Robert Bianchi
Associate Professor Robert Bianchi

“These are all investments that we don’t have a lot of history or data on, but which are growing in importance in a low global interest rate environment and a low return world.

“Most funds focus on traditional portfolios of stocks and bonds, but with returns from these assets likely to be lower than the historical average many fund managers are beginning to increase their asset mix towards alternatives.

“So now there is a greater need to better understand the risks and returns and whether alternatives are an acceptable option for mainstream investment funds and superannuation.

“We want the Alternative Investments Conference to become a forum where the best researchers from all over the world come together to share new research and ideas in this field.”

The keynote speakers at the inaugural conference will be Dr Frédéric Blanc-Brude, the director of EDHEC Business SchoolAsia-Pacific and of the EDHEC Infrastructure Institute-Singapore, and Professor Joëlle Miffre, a Professor of Finance at EDHEC Business School, France.

Dr Blanc-Brude is an economist who specialises in unlisted investments, ranging from private equity to infrastructure, real estate and other direct and long-term forms of investment.

Professor Miffre’s research focuses on the management and pricing of commodities and equities.

The two-day conference is to be held at the Hilton Surfers Paradise on 3-4 November, 2016.