GLOBAL - A strong majority of global pension fund investors believe active managers have the ability to deliver alpha, a new survey by Pyramis Global Advisors found.
The firm, a subsidiary of Fidelity Investments, found that Canadian plan sponsors were the most bullish on the ability of active managers to outperform their benchmarks, with 88% backing the idea. Some 77% of Nordic plans agreed, 76% of UK plans and 70% of US pension plans.
Pyramis surveyed 427 corporate and public pension plans in 12 countries with combined asset of over US$1trn.
Pyramis chief investment officer Young Chin said: "plans are seeking ways to return to equity markets after losses suffered in 2008 and the vast majority of institutional investors believe actively managed equity strategies, versus passive management, will deliver excess market returns in the future."
Pension funds are back to seeking returns after their assets were pummelled by the global financial crisis.
Pyramis said many schemes are looking to increase their global equity allocations, particularly in emerging markets. Dutch pension managers showed the greatest interest in emerging markets, with half saying they planned to increase their exposure. Nearly half of all Nordic pension funds said the same, while Canada and the US were less enthusiastic with 30% and 25% respectively planning increases.
Schemes are also turning to alternatives in order to manage volatility with about a third of all plans in Europe and the US saying they were using hedge funds, infrastructure or private equity to dampen volatility.
Globally, investors viewed volatility, coupled with their low funding status and risk management, as their biggest hurdles.
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