UK - Larger pension funds are poised to move up to a 10th of their portfolios into private equity, the British Venture Capital Association claims.
It says it is not “uncommon” for schemes to hold 3-5% in the asset class and it expects allocations to rise over the next three to five years.
BVCA chief executive John Mackie believes schemes are holding off because of economic uncertainty.
“There seems to be some slightly anomalous behaviour in the market. Pension funds say they want to increase their allocation to the asset class but it is almost as if a wall of money is building up in the market.”
Mackie said there were already signs of an “increased commitment” to private equity and he predicted confidence would return by the second half of the year.
“The decisions have been taken in many cases in principle and we are seeing this ‘increasing appetite’ reflected in some of the pension funds across Europe.”
Mackie stressed that schemes investing in private equity needed to make long-term commitment to the asset class.
He said those which tended to “dip in and out” were less comfortable with the asset class.
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