Expectations of low returns across traditional asset classes are sending institutional investors to search out returns and diversification via investments in private assets.

That’s according to a report from Cerulli Associates, which says that institutions are looking at a broader range of investment structures, seeking better returns than those currently expected—which are below target returns.

“The persistent low-return environment has led several institutions to cut their assumed rates of return,” Michele Giuditta, associate director at Cerulli, says in the report. “The two largest U.S. public pensions, the California Public Employees’ Retirement System and the California State Teachers’ Retirement System board, plan to gradually lower their target rates to 7 percent from 7.5 percent during the next couple of years.”