Standard & Poors said more U.S. not-for-profit healthcare providers are revising investment policies and reallocating portfolios to include alternative investments. Despite perceived risks, the trend is expected to continue, with providers using the slightly more aggressive strategy to diversify risk and boost investment returns, S&P said. Much of the money allocated to alternative investments has gone into hedge funds, although the term generally also includes private equity investments and real estate. S&P said its not-for-profit healthcare group is neutral on the use of alternative investments as it relates to credit ratings, but such investments unique risks and characteristics require more disclosure, analysis and monitoring of portfolios and oversight procedures. Many of S&Ps 700 rated healthcare providers have unrestricted cash and investment balances that can constitute as much as 50% of their total assets, S&P said. -- by Cinda Becker
Hospitals diversifying investments
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