Pension funds move into alternative investments

Pension funds advised by Watson Wyatt gave out 61 mandates for alternative investment in 2005 - four times as many as in 2003, the company says. The most popular alternatives were absolute return mandates, real estate, high-alpha bonds and private equity companies.

Kevin Carter, European head of investment consulting at Watson Wyatt, said: “Generating returns to reduce deficits and implementing risk reduction strategies are now really the top priorities for the majority of pension funds."

As well as diversifying their portfolios to seek better returns, pension fund managers are also making more use of swaps - Watson Wyatt advised on 17 in 2005, up from five in 2004. Most are inflation or interest rate swaps, representing increasing use of derivatives for risk management by pension funds, Carter said.

  • LinkedIn  
  • Save this article
  • Print this page  

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: