To many investors, alternatives are a relatively new phenomenon directly associated with finding solutions to the impact of the financial crisis five years ago. But not for all, says Calvin (Chip) Clark Jr., president and chief investment officer of GR-NEAM, which manages more than $60 billion of nonaffiliated insurance company assets.
Executive SummaryWhile at least one survey taken earlier this year indicated that P/C insurers intend to decrease the liquidity of investment portfolios in 2014, there are some liquid alternatives available for consideration, experts explain. They also emphasize that ERM principles are guiding decisions about alternative investments.
“For many of the larger P/C insurance companies, alternative investments are not an entirely new asset class,” Clark says.
Insurers could be considered a special case, perhaps. GR-NEAM’s research on the P/C industry shows a 10-year history of allocations to equities close to the 20 percent level. After considering the 60-80 percent in traditional “core fixed income” assets, this can leave a small allocation to alternative investments, such as private equity, hedge funds and mezzanine investments.