UK - The amount of new money flowing into private equity from pension funds has fallen from £1.64bn in 2001 to £796m in 2002, a report from the British Venture Capital Association has confirmed.
The money from pension funds represents 10% of total funds raised compared to 12% the previous year.
BVCA chief executive John Mackie admits the figures do not represent pension funds’ entire holdings in the asset class.
He said: “All the information from last year was that pension funds were increasing their commitment to the asset class or making a new, first-time commitment to it.
“I think what has happened is that despite making a commitment to private equity it is taking time to get that capital working.”
But Mercer head of investment strategy Andy Green said that there is unlikely to be any further significant shift to private equity over the short-term.
He said: “In the next year or two the focus may turn to alternative investments.
“But I doubt it will mean a substantive increase in levels of investment in private equity from pension funds, especially in an environment where pension funds are underfunded.”
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