Nearly half of European investors believe equities will offer the most compelling investment returns over the next 12 months, according to MHP Communications’ annual survey of the pensions and investment industry.

MHP questioned 88 senior figures at pension funds, consultants and investment management houses, of which 16% believed hedge funds will offer the best returns, followed by private equity with 12% and fixed income at 10%.

The survey also found that investors are optimistic about the Eurozone’s economic outlook, with 64% seeing significant upside from the Eurozone crisis, if this were to lead to a stronger fiscal union in Europe.

Multi-strategy asset management companies will emerge as the most successful, post-crisis according to 49% of respondents, with 20% voting in favour of the boutique firm.

Among the emerging markets products, 34% expect equities to offer the best returns over the next 12 months, followed by 30% for multi-strategy and 17% for emerging market currency, with only 9.3% favouring emerging market debt.

Sally Todd, managing director and head of asset management at MHP, said: "Whilst it is recognised that crisis periods may bring non-standard winners, almost 50% of respondents believed equities would prove to be the asset class capable of delivering the most convincing returns over the next year, with risk mitigation continuing to remain front and centre on the agenda.

“While developments including Basel III would appear to be contributing to reducing foreseeable risks, regulatory issues are the top concern keeping respondents awake at night followed by overly-tight austerity measures and increasingly negative sovereign debt situations sweeping across the global economic landscape.”

Among the 88 respondents were CEOs, managing directors, partners, CIOs and heads of communications, with 65% working within the asset management sector, 19% in a consultant/advisory role, 7% in the pensions arena and the remainder being senior figures from a range of other financial backgrounds.

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