asset owners, investment portfolios, and regulatory environments are increasingly sophisticated, yet face new challenges. In order to stay ahead of the curve, institutional investors must maintain a dynamic and strategic approach to their investment and operations strategies. asset owners are seeking to create a robust framework that enables them to navigate an ever-changing investment landscape, where rising market volatility, evolving regulations, and accelerating technological changes are just a few of the key challenges they must address.
Alternative Investments: A Growing Focus
asset owners are increasingly allocating a larger share of their portfolios to alternative investments. The survey revealed that private market assets now make up 13% of the average portfolio and 86% of portfolios have some investment in private assets. asset owners are attracted to alternative investments for their potential to diversify portfolios and generate returns in a low-interest-rate environment. Private debt, commercial real estate, and direct lending are the most popular sectors within alternative investments.
- 68% of respondents invest in hedge funds, absolute return investments, and other diversifiers.
- Cryptocurrencies and other digital assets are invested in by 21% of those that allocate to private markets.
Liquidity Management: A Growing Priority
asset owners are becoming increasingly focused on liquidity management, recognizing its importance in meeting their investment goals. The survey found that 60% of asset owners now view liquidity as a top priority, and cash allocations average 11% of portfolios globally. asset owners are seeking to strike a balance between generating returns and maintaining liquidity in their portfolios. This is particularly important in a low-interest-rate environment where investors are seeking to maximize returns while minimizing the risk of liquidity constraints.
Risk Management: A Key Consideration
asset owners are facing a range of external investment challenges, including interest rate changes, geopolitical instability, and climate change. The survey found that liquidity risk is the most important risk metric, ranked as a top-three concern by 54% of respondents. asset owners are taking a proactive approach to managing risk, recognizing the importance of diversification and hedging strategies in reducing exposure to market volatility.
Technology and Operational Efficiency
asset owners are investing heavily in technology and operational efficiency initiatives, recognizing the importance of automation and data-driven decision-making in driving investment returns. asset owners are focusing on areas such as portfolio analytics tools, compliance and regulatory reporting, and outsourcing functions to service providers.
| Technology Investment Priorities | % of Respondents |
|---|---|
| Portfolio Analytics Tools | 51% |
| Compliance and Regulatory Reporting | 48% |
| Outsourcing Functions | 45% |
Regional Differences and Emerging Trends
asset owners in different regions are exhibiting distinct characteristics in their investment strategies and risk management approaches. asset owners in EMEA and APAC are allocating lower amounts to equities and more to cash than their U.S. counterparts. These regions are also showing a greater focus on technology and data-driven decision-making in driving investment returns.
Expert Insights
asset owners are seeking to empower their missions by maximizing investment returns and serving their constituents, communities, and the world. The global survey highlights the importance of technology and operational efficiency in driving investment returns and managing risk. asset owners are leveraging technology to streamline processes, enhance operational performance, and drive investment returns.
Asset Owners in Focus: Global Asset Owner Peer Study 2025
The study, conducted by Northern Trust, provides a comprehensive overview of the investment and operations strategies employed by institutional investors worldwide.
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management, and banking to corporations, institutions, affluent families, and individuals. asset owners are seeking to empower their missions by maximizing investment returns and serving their constituents, communities, and the world. Northern Trust has a global presence with offices in 24 U.S. states and Washington, D.C., and across 22 locations in Canada, Europe, the Middle East, and the Asia-Pacific region.
“Today’s asset owners maintain sophisticated portfolios in a time marked by economic and geopolitical uncertainty – and must execute their investment strategies while efficiently managing costs and navigating the regulatory environment.”
– Melanie Pickett, Head of Asset Servicing, Americas at Northern Trust
“Asset owners in EMEA are increasingly recognizing the value of technology in addressing both operational and investment risk.”
– James Wright, Head of Asset Owners, EMEA at Northern Trust
“In APAC, asset owners are relying on outsourcing and technology adoption to drive operational efficiency.”
– Angelo Calvitto, Head of Asia-Pacific at Northern Trust
Further Survey Details and Commentary
asset owners can learn more about the findings of the global survey and hear from industry experts on A-Suite by Northern Trust, a community in which asset allocators can collaborate and move the needle on issues that matter most to them. asset owners can visit northerntrust.com for more information on the global survey and Northern Trust’s expertise in asset ownership and investment management.
