Pensions fill a 'fixed income sized hole' with alternatives
Wednesday, February 17, 2021
Bailey McCann, Opalesque New York:
Pension funds continue to shift toward alternatives, according to a new study from pension consultants Willis Towers Watson. In 2000, just 7% of pension fund assets in developed economies were allocated to private markets and other alternatives, that number now stands at 26%.
The shift comes largely at the expense of equities, down from 60% to 43%. Bond allocations have also fallen marginally from 31% to 29%. The average allocation now sits at equities 43%, bonds 29%, alternatives 26% and cash 2%.
Marisa Hall, co-head of the Thinking Ahead Institute at Willis Towers Watson says that the trend toward alternatives is positive overall. "This paints a picture of a resilient industry in good health and relatively well placed to weather the effects - economic and otherwise - of the ongoing pandemic," she said.