TheEdge
KUALA LUMPUR: About 50% of trustees and fund sponsors in Kuala Lumpur and Singapore are concerned that diversification into alternative assets may dilute the expected rate of return, according to a survey by Watson Wyatt Worldwide, a global consulting firm.
Meanwhile, lack of governance was cited by more than 50% of the respondents in Hong Kong as one of the reasons for not considering alternative asset classes.
Watson Wyatt said in a statement that a growing number of new and diverse investment opportunities are now available but funds generally have reservations about shifting away from conventional asset classes.
In the survey, trustees and fund sponsors in Hong Kong, Kuala Lumpur and Singapore were asked to vote on their choice of four asset classes, namely real estate investment trusts (REITs), commodities, hedge funds and infrastructure.
It said the survey results showed that funds were more comfortable with hedge funds followed by REITs.
Watson Wyatt's head of investment consulting for Malaysia Puah Ser Sze said: "Although hedge funds have been growing rapidly over the past three years, trustees and fund sponsors in the region require some time to warm up to new investment opportunities."
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