European tax-exempt firms wary on alternative investments

European tax-exempt institutions are lagging significantly behind their US counterparts in private equity and hedge fund investments, although the appeal of alternative investments is gaining popularity, according to Goldman Sachs.

Private equity commitments by pension funds, endowments and foundations have increased from $152 billion to $220 billion in North America from 1999 to 2001. In Europe - including the UK - they have risen from $14 billion to $23 billion, with much of this increase attributable to a 50% increase in the sample of institutions, said a report by the US investment bank and US-based investment services firm Frank Russell.

Europe is also significantly behind the US in hedge fund investment in this