UK - Charities concerned at a lack of transparency in hedge funds should invest in other absolute return products instead, Schroders says.
The fund management company recommended that pension funds should look at absolute return long-only funds instead, which have similar return characteristics to hedge funds but cannot go short, or sell shares they do not own.
Instead, these funds hold high cash balances to manage the downside risk of equities.
The Pensions and Lifetime Savings Association (PLSA) has announced it will shrink its board by more than one-third as part of a governance overhaul to make it "agile and more appropriate".
Smaller FTSE 350 defined benefit (DB) schemes were nearly 15 percentage points less well-funded than larger schemes in 2017, according to a Goldman Sachs Asset Management (GSAM) analysis.
The advent of collective pension systems could help the UK avoid demographic challenges which will make it "impossible" for society to help savers in retirement, experts say.