By David G. Barry
Digital assets are clearly on the radar of institutional
investors.
That’s a key takeaway of a survey of alternative investment allocators done by
the law firm Seward & Kissel.
According to the results, 41% of those surveyed said they are looking to
increase their allocation to digital assets – the same figure who are looking
to increase their allocation to private equity. The only investment segment
that scored higher was infrastructure at 44%. More noteworthy is that in 2021,
just 12% of survey participants anticipated increasing their allocations to
digital assets.
Also, on the 2022 study, 48% of the participants indicated that
their organizations do not invest in digital assets. That’s down from 69% who
shied away in 2021.News of the high interest by LPs in digital assets comes amidst the sector
being pummeled. Bitcoin, for instance, is worth less half of what it was valued
at six months ago. Additionally, a Goldman Sachs basket of 11 stocks which is
tied to crypto pricing is down more than 60% over the last six months.
Seward & Kissell did not say how many people were surveyed but did say that
high net worth individuals and family offices accounted for a one-third of the
respondents. Funds of funds accounted for 27% while endowments, foundations and
non-profits, investment consultants and seeders each represented about 10%.
The survey also is interesting in that 93% of respondents said that investment
strategy/process was the number one criterion for selecting a manager. Performance
and pedigree were next, with ESG and diversity & inclusion on the
investment team given less importance.
You can access the report here: https://www.sewkis.com/publications/seward-kissels-2022-alternative-investment-allocator-survey/.