Global sovereign wealth funds, including state pension funds in the West, have reallocated more of their investments from low-interest bonds to international real estate and private equity, a survey by Invesco found.

In the last year, real estate holdings increased by 69 percent, according to the Global Sovereign Asset Management Study, which looked at 38 sovereign investors. They included state pension funds and sovereign wealth funds that have assets of nearly $5 trillion. The funds represented the West (11); Asia (10); emerging markets in Latin America and Africa (nine); and the Middle East (eight).

While private equity stakes rose by 61 percent, sovereign investors fled international and domestic bonds, down 38 percent and 18 percent, respectively.

Low interest rates and “high volatility in equities and market-wide dissatisfaction” with risk and return in that sector fueled the move to alternative assessments, the report said.

Alternative investments gained favor in all four regions. In the West, the allocation to them rose 26 percent over 2012; in the Middles East, 69 percent; in emerging markets, 60 percent; and in Asia, 54 percent.

Western funds allocated about one-fifth (21 percent) of their funds to alternatives. In Asia (12 percent) and the Middle East (9 percent), alternatives made up a lower percentage of total allocations. Emerging markets allocated 2 percent to alternatives.

“There is also an increasing trend of direct investment in private equity rather than through third party funds,” Nick Tolchard, Invesco’s managing director for sovereign investors, said at a press conference in Dubai announcing the study.

The study was conducted for Invesco by NMG, whose methodology included interviews and analysis of investment choices.