endowments

Endowments and Pension Fund Still Liking PE

by

February 11, 2013

Several articles this week report on the preferences for alternatives and private equity as expressed by pension funds and endowments. They are still putting money into PE, it seems.

 

The top 200 pension plans are benefitting financially from alternative investments, according to Pensions & Investments latest retirement plan survey, although the survey results noted a decrease slightly in some of the PE categories, with buyouts increasing by 4%.

 

The article said that private equity’s share of assets was down 60 basis points to 9.4%. The WSJ says that US endowments are still increasing their allocations to PE on a steady basis. They are allocating about 54% on average to alternatives, which includes private equity (see image).

 

Another study reported by Reuters says that pension funds in Australia, Canada, Japan, the Netherlands, Switzerland, Britain and the United States have upped alternative investments, including property, hedge funds, private equity and commodities, from 5 to 19 percent since 1995.

 

The funds add riskier, higher-yielding assets to portfolios to compensate for shortfalls in funding. Britain has increased its exposure to alternative assets the most, from 3 to 17 percent, followed by Switzerland, Canada, the United States and Australia. (Image source: NACUBO)

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