SA’s first alternative investment report released

Jaltech, an alternatives investment specialist, undertook a recent survey aimed at understanding the alternatives investment market in South Africa and, in doing so, gathered data from over 1300 participants comprising individual investors and financial advisors. The survey focused on understanding the mindsets, trends, approaches and behaviours of individual investors and financial advisors towards alternative investments.

The survey findings shed light on the growing momentum of alternative investments within the South African market, indicating sustained and increasing levels of interest from both individual investors and financial advisors. This trend highlights the evolving landscape of investment preferences and the recognition of the potential benefits offered by alternative investments in diversifying portfolios and pursuing potentially higher returns.

Below is a summary of the findings (click here to gain access to the full report).

Key Takeaways

Alternative investments are in high demand

The survey findings revealed a strong preference for alternative investments among both individual investors and financial advisors in South Africa. According to the data, the popularity of these investments stems from various factors, including the desire for diversification, the potential for higher returns, and the opportunity to invest in financial assets that are not closely linked to traditional markets.

The data demonstrated that over 65% of participants invest (allocate clients’ capital) in alternative investments, of whom over 78% plan to increase their allocation over the next 24 months.

Investors favour various alternative asset classes

The results showed that among the different types of alternative investments, structured products, hedge funds, and cryptocurrencies have traditionally been the most popular choices. Looking ahead, alternative investment opportunities in renewable energy, technology/AI, and (once again) cryptocurrencies are the most sort after amongst individual investors and financial advisors.

Impact/ESG investing in low demand

The findings revealed a notable lack of demand for ESG investing, as well as a disparity between financial advisors and investors towards the space. In the past, none of the investors had allocated funds to Impact/ESG-focused investments, and none of them expressed intentions to prioritize this asset class in the future.

Solar/Renewable investments take the top spot

The demand for solar/renewable energy has seen a notable increase, rising from 11% historically to 23% in terms of future interest among investors. The divergence in investment preferences between individual investors and financial advisors persists regarding Impact/ESG investments, specifically in the case of Solar/Renewable. While individual investors view this asset class as their preferred alternative investment, financial advisors tend to prioritize it to a lesser extent.

In addition to the above, the survey covers numerous aspects of alternative investments, including portfolio allocation, what drives investment in alternative investments and more. To gain access to the full report, click here.

Chris McCormick & Jonty Sacks – Jaltech Fund Managers

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