In the decade after the Global Financial Crisis (GFC), fixed income allocations declined. Commercial real estate was one of the beneficiaries as a recipient of those outflows.

But the current interest rate hike cycle has increased the attractiveness of fixed-income strategies again, with institutional investors shifting their portfolio allocations towards government bonds, investment grade credit, high-yield corporate credit and private credit.

As examples: For allocations by sovereign wealth funds and private capital investors, fixed-income allocations have risen, while real estate, private equity and hedge fund allocations declined in 2023.