Institutional Investors - 2012 global survey on alternative investing - Asset class trends

Hi, I'm Darren Spencer, Director of Alternative Investment Consulting at Russell Investments. Our 2012 global survey on alternative investing has provided a valuable window into the practices and attitudes of many institutional investors around the world. One of the key reasons for conducting this survey is to better understand the changes investors have made, and are planning to make with their alternative assets. In our dialogue with investors, we have gained insight into the demand for alternatives, how investors world-wide are using alternatives to help achieve their investment objectives -- as well as portfolio integration challenges and solutions. The results have been clear. First, the survey points to the potential for increased allocations to alternatives in the future. In an environment that is characterized by low return, a high economic level of uncertainty, and financial market volatility, alternative are a critical component of a diversified multi-asset portfolio. This is especially true in today's environment given the importance of diversification and alpha generation. Second, implementation approaches are evolving. Customized solutions or the Fund-of-One approach (where investors can target a specific risk and return outcome, achieve more targeted strategy exposures, and be more opportunistic in their approach). This has provided a rich source of portfolio flexibility. Third, in the area of integrating alternatives into portfolios education is a primary concern. Investors are seeking additional education within their organizations about alternatives. Investment decision makers want to be more informed about strategy characteristics, risk/return drivers, and the role that alternatives play in the overall portfolio. There's much more detail available, and I encourage you to request a complete copy of Russell's 2012 Global survey on alternative investing. For more highlights on the history and results of the survey, I encourage you to take a few minutes and listen to the complimentary video featuring my colleague Julie Cormier. We trust this research provides valuable perspective on how sophisticated institutional investors, like you, are implementing alternative investment programs. If you have any questions, please feel free to reach out to one of us. We will be happy to answer your questions and look forward to a continued dialogue.