11/1/2010
By Francesca Fabrizi
Pension funds across Europe and further afield plan to introduce more risk into their portfolios by increasing their allocations to alternatives, according to a recent survey conducted by specialist consulting firm, bfinance.
As many as 27% of respondents to the survey - carried among institutional investors across Europe and North America - plan to boost their allocation to property over the next six months, while commodities (16%) and private equity (16%) allocations are also set to increase. Hedge Funds and Fund of Hedge Funds, however, proved less popular with only 8% and 5% respectively planning to increase allocations.
Looking at the more traditional asset classes, equities also remain popular with 27% planning to increase their exposure over the next six months, while investors are continuing to shy away from fixed income.
David Vafai, CEO of bfinance, commenting on the findings, said: "Back in October 2008 when we conducted the first survey, we saw that there appeared to be disenchantment with diversification and active management. We saw the pendulum start to swing back last spring with investors planning to increase their equity allocation and now we can see the momentum continue with investors actively seeking diversification in alternative asset classes."
Other findings from the report were that investors were planning to continue to reduce their domestic equity holdings in favour of going more further afield, while in recent months, a significant proportion of investors (62%) have either reviewed their managers or put them on a watchlist for 21% of their AUM on average. Of those who have reviewed, an average of 7% of AUM has seen a switch in managers.
