Meb Faber recently referenced this BNY Mellon publication regarding institutional investment in alternative assets. It certainly verified institutional investors may in fact be delusional (Meb put it a bit more colorfully) when it comes to return expectations. We thought the State Street report showing the average institutional investor’s expected return of 10.9% was a “bit” crazy. However, the BNY Mellon report takes crazy to a whole new level; for 2015 67% of respondents expected returns of 12-18% or more with only 1% of those surveyed expecting a much more reasonable 6-8% for their hedge fund investments! Many institutional investors were certainly disappointed and based on the State Street publication’s reporting of the very short time horizon given to managers who underperform, they made portfolio changes that are likely to degrade future returns.