An increased focus on shareholder engagement and a likely boost in multi-asset and alternative investments were some of the key findings from a recent survey on the future of the European pensions and investment industry.

Nearly two thirds of respondents to the Penrose Financial survey – which included over 100 senior figures from Europe’s pension funds, consultants and investment houses – believed that greater expectation from clients will compel fund managers to increase levels of shareholder investment; while 44% believed that environmental factors posed a significant risk to portfolios and should be a key consideration when making investment decisions.

Penny Shepherd MBE, Chief Executive of UKSIF – which promotes responsible investment and other forms of finance that support sustainable economic development, enhance quality of life and safeguard the environment - commented on the findings: “As this survey demonstrates, environmental, social and governance issues have now become a mainstream investment concern. The financial crisis and the Gulf of Mexico oil spill have undoubtedly both accelerated pressure for change.

“I believe that we’re now approaching a tipping point and that responsible ownership and investment will become the norm for major occupational pension funds, insurance companies and other significant investors worldwide by 2020."

Carl Rosén, Executive Director at the International Corporate Governance Network (ICGN), agreed that the findings were no big surprise. “What we are seeing at ICGN is a very strong interest in the issues surrounding shareholder engagement – we have had about 15% more members joining in the last eight months and we see quite a strong demand in the master classes and conferences we plan to run on these topics next year.

“This increased interest has been driven by a combination of factors – firstly a reaction to the financial crisis as a lot of investors now realise that you need to engage in order to change things; while a lot of the larger principal investors and asset managers see that there is a threat of over regulation if there is no proof that they are engaging themselves. In addition, the introduction of the Stewardship Code has also had a significant impact.”

The survey also revealed that almost the majority expected multi-strategy and specialist boutique managers to emerge as the most successful over the coming 18 months, with multi-asset (37%) and alternatives (27%), particularly unleveraged absolute return funds as opposed to traditional hedge funds, were seen as the asset classes that will attract the highest inflows from institutional and professional investors over the next few years.

Additionally, the majority (65.7%) suggested 5-20% is a suitable allocation to emerging markets over the next 12 months, with a view to increasing this percentage as stability returns.

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