Pensions Boost Alts. Allocations Threefold

Jul 13 2010 | 1:11pm ET

Pensions funds allocate almost three times as much money to alternative assets today than they did 10 years ago, a new study shows. But the Towers Watson report shows that real-estate funds remain the major “alternative asset” held by pensions, although hedge funds and private equity funds continue to make inroads.

Alternative assets now make up 17% of all global pension fund assets, up from 6% at the turn of the millennium. And while real-estate funds still account for 52% of that total, that’s down from 58% just two years ago.

Funds of private equity funds are the second-largest investment for pensions, with 21%, up from 20% two years ago. Funds of hedge funds came in third, at 13%, the same as in 2008. Still, Towers Watson’s Carl Hess said that hedge funds and p.e. are gaining in popularity.

“We believe that more larger investors will invest directly in future rather than through funds of funds, particularly due to positive developments on fees, which are increasingly better-aligned with investors’ interests,” he said. “This, and liquidity factors, would account for the static fund of hedge fund AUM last year and only modest AUM growth in private equity fund of funds.”

Thus, only one hedge fund or p.e. investor made Towers Watson’s list of the top 10 global alternative managers, topped by Australia’s Macquarie Group with $51.6 billion in pension fund assets invested in infrastructure. HarbourVest Partners came in ninth, with $21 billion in pension assets.


In Depth

Fundraising for Mid-Sized PE Funds: Should You Use a Registered B/D?

Dec 6 2016 | 7:18pm ET

When does a fund sponsor need to use a registered broker/dealer when raising capital...

Lifestyle

Trump Attends 'Villains and Heroes' Costume Party Dressed As...Himself

Dec 5 2016 | 11:16pm ET

U.S. President-elect Donald Trump attended a "Villains and Heroes" costume party...

Guest Contributor

A Hard Look At Your ‘Soft’ Hedge Fund Marketing Information

Dec 8 2016 | 9:03pm ET

Conventional wisdom holds that due diligence examines quantitative as well as qualitative...

 

From the current issue of

Since the inception of Modern Trader, a core editorial theme has centered on the wisdom and power of crowds. Editorial emphasis has focused on companies and projects engaged in the collection and analysis of information. 

AVAILABLE NOW at BARNES & NOBLE

NEWSTAND LOCATOR