Global asset owners are significantly increasing their exposure to infrastructure and emerging market investments, according to Marsh's 2026 Barometer research. More than half (51 per cent) of global asset owners plan to increase allocations to infrastructure over the next 12 months, while 41 per cent intend to increase allocations to inflation-linked assets and 47 per cent to emerging market equities. The research, which surveyed 430 asset owners with a combined US$5.76tn under management, reveals a strategic shift toward diversification and downside protection. This trend aligns with the broader tactical asset allocation approach where investors seek to capitalize on short-term market inefficiencies through temporary shifts in asset weights.
Cash allocation strategies are evolving significantly, with more than a third (38 per cent) of respondents planning to increase cash holdings in the next year, representing a substantial increase from 9 per cent in 2025. According to Marsh Investments and Retirement global chief investment officer Niall O'Sullivan, these shifts suggest asset owners are adopting a deliberate barbell position, strengthening downside protection and diversification while retaining flexibility to respond to market opportunities. The research found that nearly half (48 per cent) of respondents had adjusted their geographic positioning over the past 12 months, with more than a third (37 per cent) reducing overall portfolio risk and increasing liquidity or cash holdings. However, tactical cash allocation through tactical asset allocation strategies faces challenges including whipsaw risk, tax inefficiency, and over-complicating core portfolios.
Private market participation is expanding significantly, with almost all (96 per cent) respondents reporting allocations to private markets, up from 80 per cent in 2025. However, appetite for private debt appears to have cooled, with 34 per cent of asset owners planning to increase holdings this year, down from 48 per cent in 2025. Marsh Investments and Retirement chief investment officer of alternatives Garvan McCarthy noted that private markets have become easier to access but harder to manage well, with valuations stretched and success now depending on deep deal expertise rather than simply having capital to deploy. 44 per cent of asset owners said they are pursuing greater selectivity across private markets as valuations remain the most significant factor shaping capital deployment.
Technology dominates the longer-term investment outlook, with 83 per cent of respondents saying technology, automation, and broader disruption are significant to investment opportunity and risk over the next five to 10 years. While geopolitical risk was considered the biggest near-term concern of asset owners, technology transformation is more relevant to pension funds. As reported by Marsh, this year's research comes amid a historic rise in capital spending on AI infrastructure, data centres and semiconductors, which is already boosting earnings. The research emphasizes that capital is on the move in pursuit of true diversification, inflation protection and flexibility, requiring integrated advice and solutions that translate strategy into action across markets, risk, liquidity, and long-term return goals. However, tactical asset allocation over 10-year periods faces significant costs, with frequent trading creating tax friction and market timing risks that can reduce net returns by over $1,250.
