Institutional investors are seeking to protect themselves from an economic downturn by increasing their allocations to active strategies in the private markets this year, BlackRock found in a survey.

Hedge funds are back in favor, with 20 percent of the firm’s clients planning to allocate more to the industry, while private equity, real estate, infrastructure, renewable assets and private credit are also poised to benefit from increased investor interest, according to a statement Thursday from BlackRock. The world’s largest asset manager surveyed 224 of its biggest institutional clients, representing $7.4 trillion in assets, over a three-week period starting in late October.

Private markets offer investors relatively higher yields in today’s low interest-rate environment as well as inflation-hedging, counter-cyclical investments, according to BlackRock. While the firm’s clients are turning to active investment strategies to shield themselves from a downturn, about 65 percent of those surveyed plan to leave their cash allocations unchanged for the year ahead.

“Maintaining current cash levels and increasing allocations to active managers may seem counterintuitive,” Edwin Conway, global head of BlackRock’s institutional business, said in the statement. “But for many of our clients, it’s their two-pronged strategy for navigating risk and potentially volatile markets.”

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Sixty percent of institutional investors globally expect to increase their allocations to infrastructure and renewables in 2018, while 43 percent plan to invest more in private equity allocation, according to the survey. Forty-two percent of respondents said they would increase their real estate allocations, while 58 percent plan to allocate more to private credit.

Taking a wider view of fixed income, BlackRock’s clients showed interest in developing countries. Thirty-seven percent of institutional investors said they wanted to allocate more capital to credit strategies in emerging markets, the survey found.

“In the current environment of record-high asset performance, we believe that active portfolio decisions need to be taken by institutional investors this year,” Conway said in the statement. “For several years, we have been talking to clients about the need to embrace alternative strategies as a way to add diverse sources of return, and offset the current rate environment.”