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Trustees increasingly willing to consider alternative assets

08 October 2013

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Pension scheme trustees are increasingly willing to consider a wider range of asset classes than has previously been the case, Aon Hewitt has found.

According to a poll of over 750 delegates at the consultant's annual conferences, 40% of the delegates said that they were open to the idea of investing in new asset classes.

The data indicates that trustees are now much more prepared to accept that alternative assets have a key role in reducing portfolio risk and may also offer the chance of delivering attractive returns.

Aon Hewitt said that the results of the poll reflected the findings of its 2013 Global Pension Risk Survey, which revealed that 36% of schemes expect to increase their allocation to alternatives over the next 12 months.

Aon Hewitt's global investment practice partner Tim Giles said: "In the current hostile market environment, pension schemes are examining every opportunity to balance risk and reward in their investment strategy.

"The response we saw from the delegate survey at our conferences both backed up the findings of our survey earlier in the year and highlighted the increasing readiness that trustees and schemes are showing to investigate new opportunities.

"These seem to be taking various forms, including examining alternatives to traditional indexation approaches, accessing a wider spectrum of absolute return bonds funds or exploring better diversified hedge fund investments."

Giles added that along with the willingness to look at new options, some schemes are more open to the idea of using fiduciary management so that they can strengthen their expertise on how to better understand the asset classes they are using.

First published 08.10.2013

monique_simpson@wilmington.co.uk