UK - Demand for hedge funds and non-UK property has skyrocketed in the past year among pension fund clients at Watson Wyatt Investment Consulting.
The number of hedge fund mandates doubled compared to the previous year, and there was a marked shift away from UK property, the consultants said.
Overall, property mandates increased 60%, but UK property only accounted for 44% of mandates, down from 93% in 2005.
Watson Wyatt manager research global head Craig Baker said: “Generating returns to reduce deficits and implementing risk reduction strategies are a high priority for many pension funds. As a result, many are moving some of their assets away from benchmark-sensitive approaches to make meaningful allocations to alternative assets.”
He added the trend towards increased diversification using alternatives among higher governance pension plans was likely to continue in the future, as investment opportunities in the area continued to grow.
The Pensions Regulator (TPR) has set out plans to use "new regulatory initiatives" with over 1,000 schemes as it aims to tighten its regulatory grip and boost member outcomes.
HM Revenue and Customs (HMRC) has announced it is delaying the provision of data that will enable pension schemes to confirm the guaranteed minimum pension (GMP) benefits to pay to members until the end of the year.
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