Natural Resources Top Performer
Natural resources were the top performing asset class across alternatives, posting a one-year rolling internal rate of return (IRR) of 34.6 per cent through the first quarter of 2022, off the back of a strong commodities rally, says Preqin’s ‘Global Report 2023: Natural Resources.’ This is ahead of an IRR of 33 per cent for real estate and 29.3 per cent for private equity, representing the highest level since it began publishing the index for natural resources in 2009. Natural resources fund managers net distribution to investors in the first quarter of 2022 has been affected by geopolitical disturbances, with most commodities already being in a super cycle when the Ukraine-Russia conflict began. This act had repercussions through the global commodities markets, during a time when energy prices around the world were already at their highest levels in years because of faster than expected post-COVID demand recovery. And it is these high commodities prices that allowed fund managers to liquidate their investments on very favourable terms and return capital to investors, with a record net distribution of $22 billion for the 12 months ending March 2022.