UK - Investment consultants are increasingly turning their pension fund clients to alternatives to generate returns, a new report claims.
A survey of 27 of Europe’s largest investment consultants found that institutional clients were advised to allocate almost half of their active risk budgets to hedge funds, currency management and tactical asset allocation.
The study – by the Alternative Investment Management Association together with quantitative investment manager IPM, and TAA and currency management pioneer First Quadrant – found that the remainder went to long-only investments.
The survey’s preliminary survey results show that “global’ consultants” advise their pension fund clients to allocate 31% of their active risk budgets to long-only equity managers and 20% to long-only bond managers.Hedge funds take up 24% of risk budgets, while currency and TAA take up the rest.
The survey also found 90% of consultants were “confident” or “hopeful” in the ability of hedge fund managers to produce positive returns in the future.
The AIMA said that global and local consultants were equally supportive of hedge funds, with more then 90% of respondents saying they would recommend one or more external managers for hedge funds directly or through funds-of-funds products.
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