Global public pension schemes and sovereign wealth funds managing more than $3 trillion in assets fear a combination of economic slowdown and higher inflation in the next 12-24 months, a survey showed on Tuesday.

The investors face huge challenges in switching their portfolios to cope, according to think tank OMFIF, which carried out the survey of 19 funds across Europe, North America, the Middle East, Asia Pacific and Latin America.

Persistently high inflation was the top long-term concern of almost 50% of those surveyed.

In a hunt for yield, more than 40% of the funds plan to allocate more to real estate and infrastructure, while they are also looking to hedge their positions by investing more in inflation-linked government bonds.

The investors are also looking to reallocate away from China’s renminbi (yuan), citing issues around geopolitics, market transparency, regulation and capital controls.

Climate change is another concern with over 80% of respondents saying they planned to invest more in renewable industries.

However, public pension funds’ assets grew last year, giving them some cushion against market volatility.

Assets under management in the top 100 public pension funds grew by 17% in 2021 to $17.4 trillion, OMFIF said. Assets of the top 50 sovereign wealth funds rose 23% to $9.8 trillion.

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