The alternative assets managed on behalf of pension funds by the world’s largest managers grew 16% in 2010 to USD 952 billion, according to research by Towers Watson in conjunction with the Financial Times.
The Global Alternatives Survey also found that total assets under management for these managers increased by 12% to USD 1,904 billion, and that half of their assets are now pension fund assets.
The research also found that 46% of alternative assets managed on behalf of pension funds are invested in North America, while 37% are invested in Europe and 13% in Asia Pacific.
Half (50%) of European managers are in the UK; 24% are in Switzerland and 12% are in France.
The Asia-Pacific region is represented by 34 managers from Australia, Hong Kong, India, Japan, New Zealand and Singapore. Of the North American managers in the research, the majority (88%) are based in the US.
There are also two South African domiciled managers in the research.
Craig Baker, global head of research at Towers Watson Investment, said: “The case for diversity has been thoroughly tested recently, but those investors that had diversified away from simply holding equities as their main growth asset in the last five years generally performed better than those that had not.
“Given the ongoing economic uncertainty it is likely diversity will become even more important in the future.
“While in some cases this could lead to a requirement for higher governance, we think the effort to diversify is worthwhile, while not forgetting the increasing number of lower governance routes to diversity in the market.”
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