GLOBAL - Global alternative assets managed by the largest 99 pension fund alternatives managers in the world now stand at just under US$600bn, according to Watson Wyatt Investment Consulting.
Data from the company’s survey found that the top 30 pension fund managers within the areas of real estate, fund of hedge funds and private equity fund of funds, managed $380bn, $105bn and $80bn respectively at the end of 2006.
Meanwhile, commodities constituted a smaller portion among pension funds, with the top ten pension fund managers in this area being responsible for around $12bn in assets.
Roger Urwin, global head of investment consulting at Watson Wyatt, said the research demonstrated that pension funds around the world were now more prepared to increase the number of different alternative asset classes in their portfolios in recognition of some potential to enhance performance while reducing risk.
Urwin said: “In so doing however, they must be aware of the need to compete with other sophisticated investors for manager skill and capacity within these diversification opportunities.”
He added that significant fund management and performance fees must also be correctly set and managed to ensure the maximum benefit for a portfolio.
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