21/07/2010 Author: Shannon Hawthorne

US pensions set to up alternatives exposure

US institutional investors are set to increase allocations to alternatives as they seek to reduce exposure to actively managed equities, according to new research conducted by analysts at investment banking firm Keefe, Bruyette & Woods.

The survey of 51 chief investment officers at US pension funds, endowments and investment advisers revealed that around half of the respondents expect to invest in the hedge fund sector while around 40% plan to allocate to private equity and real estate.

“Assets seem poised to continue to flow to alternatives and passive strategies, as well as fixed income products,” stated the report.

In contrast, over 50% of institutions surveyed said that they expect to decrease their allocations to active long-only equities over the next three years.

BlackRock, Blackstone and Och-Ziff Capital Management were ranked particularly high by respondents when asked which alternative managers “they would be most willing to commit additional capital towards”.

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