Pension Managers Still In Love With Alternative Investments
CNBC just beat me to the punch (I hate when that happens) on a post I was preparing to make on alternative investments. Citigroup put out some interesting notes from its recent survey of pension managers, who collectively manage over $1 trillion in assets.
Here are some of the findings it contained:
- About 85% of pension managers will raise their allocation to alternative investments over the next 3 years
- Within 3 years, private equity allocations will surpass both hedge fund and real estate allocations
- Almost 90% of pension fund managers allocate to private equity vs. only 50% allocating to hedge funds
- But hedge funds get more money, larger allocations
- The majority of pension managers find the "2 & 20" fee structure unsustainable
I found most of the observations surprising, in that I would not have expected that many managers to say they will increase their allocations to alternatives over the next 3 years. I would have thought the peak had passed, and these allocations would decrease.