Pension schemes show interest in alternatives

Survey1Two-fifths of pension scheme trustees are open to the idea of investing in new asset classes, says a report which underlines the growing demand for alternative investments.

The result, from a poll of 750 delegates at a pensions conference organised by consultancy Aon Hewitt, supports a claim in the same firm's 'Global Pension Risk Survey' which said 36% of schemes expect to increase their allocation to alternative asset classes in the next 12 months.

"In the current hostile market environment, pension schemes are examining every opportunity to balance risk and reward in their investment strategy,” says Tim Giles, partner in Aon Hewitt’s global investment practice.

Giles says new strategies tested by pension schemes include alternatives to traditional indices, absolute return funds and diversified hedge fund investments.

"As a consequence of this growing willingness to look at new options, some schemes are also strengthening their expertise in order to have a better understanding of the asset classes they are using - and this is reflected by the growing prevalence of fiduciary management,” says Giles.

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