TIME quizzed 200 financial advisers, wealth managers, discretionary fund managers, fund selectors and investment analysts on their expectations for the coming year.

The researchers found 76% of those surveyed expect to increase their allocation to real estate over the next 12 months, and 74% said the same thing about infrastructure.

In terms of the reasoning, a desire to de-risk portfolios through diversification was mentioned by two thirds of those questioned (67.5%), an increased focus on ESG by 60.5% and a desire for secure income streams was referred to by 44.5% of those taking part.

A somewhat bearish outlook on markets generally has also played a role in forming these plans.

The researchers found 70% of the professionals questioned predicted a challenging economic climate and investment environment this year, and said they do not expect conditions to improve for at least 12 months.

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Andrew Gill, manager of TIME:UK Infrastructure Income, said: “In the short term, we share the view of advisers that uncertainty and volatility is likely to persist.

“However, we are seeing values stabilise in most real estate and infrastructure sectors and the reduction in bond yields seen in late 2023 should support this further. Traditionally, reducing bond yields have been a catalyst for greater investor interest in real assets, making conditions more supportive for a return to growth.

“We have also seen a significant change in market conditions and expectations with UK inflation dropping materially,” Gill added. “This could lead to earlier rates cuts than previously expected with forecasters, such as Capital Economics, moving forward their expectations for central bank rate cuts.

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“With economic growth likely to remain subdued, sectors with robust and growing cash flows, such as real estate and infrastructure, are likely to outperform over the long term. Growing cash flows should also continue to fuel income and dividend increases in most real asset sectors.”

The firm asked managers whether they anticipate increased, decreased or flat fund raising. It found 85% of alternatives managers it spoke to predicted an increase in capital raising in 2024 relative to 2023.

They also found nearly one in three forecasted a rise of 50% or more, as well as an increase in the number of fund launches across all alternative asset classes.

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The professionals surveyed pointed to investors’ desire to diversify more as the key reason to expect a ‘bumper 2024’ for these assets.

The study gathered responses from managers in Europe, Asia, the Middle East, North America and the UK.

Ocorian also found notable regional trends, with US-based and Asian managers expressing stronger positive sentiment than European managers.

The full results from the survey are in the table below:

Yegor Lanovenko, co-head of fund services at Ocorian, said: “There is a high level of confidence about the year ahead among alternative fund managers both for their own funds and for the sector as a whole, with different regional sentiments emerging

“This expected surge in capital raising and fund launches turns the spotlight on efficiency and operational excellence, and fund managers increasingly rely on expert support and trusted partners to handle their fund launches and operations at scale.”

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