Agenda
The global alternative investment market has been fluctuating. As the COVID-19 outbreak came out, uncertainties became intensified, enabling strategic actions more difficult. Since, the global financial crisis, alternative investment areas have produced relatively higher returns compared to traditional assets with the power of innovative investment targeting, techniques and abundant liquidities. However, the rapid change in the global economic environment owing to the sluiggish growth trend, especially the change in the investment ecosystem after the COVID-19 crisis, raises questions about investment returns’ continuity.
Short-term risks are decreasing thanks to the US Fed's easing monetary stance, but in the long run, when the flow of market liquidity reverses, it may face a crisis. While the value of the underlying asset has already declined or is in a stagnant state, the scale of profit to price continues to decrease, and some of the alternative assets are in the high valuation phase due to the reckless inflow of funds.
In particular cases, it is pointed out that risk factors are under the circumstances where the proportion of alternative investment in South Korea continues to increase, being centered on the pension funds as well as mutual aid associations. As investors' hedging tendency is decreased by past success stories, asset allocation is shifting toward risky assets. The recent DLF and Lime incidents are examples of potential insolvency surfaced. Unlike advanced countries, which are made under the responsibility of institutions, domestic alternative investments are unusually high in individual proportions, so issues of consumer protection and financial supervision are also emerging as challenges.
After all, the keystone relies on two elements. One is risk management methodologies in the uncertain investment surroundings. The other is the problem of discovering innovative investment targets and investment techniques. As predicted by last year's Global Alternative Investment Forum (GAIC2021), the investment is already actively taking place by identifying investment pebbles in rocks, and the investment ecosystem is undergoing a change of perception.
How should we draw a big picture for sustainable growth for the sake of the alternative investment, currently rising as the core of asset allocation. What are the opportunities and risk factors inherent in each of the alternative investment sectors such as PE, hedge funds, real estate, and infrastructure? And how should investors react on this? The Global Alternative Investment Forum (GAIC2022) is in search for a breakthrough this year, when we can't look ahead of the future under this COVID-19 era.