GLOBAL - Pension schemes are still eyeing opportunistic investments despite the severity of the current crisis, asset managers say.
The survey Future of Investment: The Next Move? showed 60% and 30% of the 225 asset managers surveyed expected defined benefit and defined contribution clients respectively to engage in opportunistic investment as part of a ‘core and explore' investment strategy.
The survey by CREATE-Research was commissioned by Citi's Global Transaction Services and Principal Global Investors.
CREATE-Research chief executive professor Amin Rajan said: "Simplicity, safety and quality are now the watchwords underpinning clients' investment goals.
"While funds consequently recognise the need to adopt a pragmatic approach to investment, managers are finding the dislocated debt markets attractive, where the savagery of the downturn is creating value opportunities."
However, the report pointed out this opportunism will occur against a backdrop of changing priorities, with asset managers predicting that DB schemes will favour mainstream asset classes - 60% are expected to increase allocations to global equities and 53% to investment grade bonds.
Some 67% of asset managers also expected DB schemes to increasingly favour liability-driven investment strategies.
DC clients are also expected to favour mainstream asset classes as they seek capital protection, with 61% of respondents predicting that the emphasis on debt and equities will continue worldwide.
Principal Global Investors chief executive Jim McCaughan said: "Client behaviour will inevitably change in response to the economic downturn. While liquid asset classes will be preferred by all client sectors, we may start to see a renewed appetite among investors for opportunistic forays into debt and equity markets in a bid to boost returns."
The survey also found 50% of DB schemes will require a manager fee structure which delivers greater value for money, while 45% of DB schemes are expected to cite uncorrelated absolute return as a key three year requirement.
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