Pension Funds Are Increasing Hedge Fund Holdings

survey1New York (HedgeCo.Net) – U.S. financial group State Street recently published a study finding that, despite Calpers recent divestment from hedge funds, 77% of pension funds expect their appetite for alternative investments such as hedge funds and private equity funds to increase over the next three years.

“The decision by Calpers to divest from hedge funds isn’t a foreshadowing of what will happen with similar investors.” Steve Nadel, Partner and Co-head of the Investment Management practice of law firm Seward & Kissel LLP, said.

“Calpers had unique reasons for their decision. Many other institutional allocators feel that the best way to generate as well as protect alpha in the long term is through investment in alternatives. So the findings in this study aren’t all that surprising.”

29% of pension plans already invested in hedge funds planned to up their exposures while 25% said they would invest into the asset class for the first time. 60% confirmed they would increase their private equity allocations and 46% said they would bolster their real-estate investment portfolios.

A study by Barclays Capital shows that pension plans in the US have increased allocations to hedge funds by around $250 billion since 2009.

Alex Akesson
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