(January 12, 2010) — European and North American pension funds are increasing their oversight and reevaluating asset managers who underperformed in the second half of 2009, a December Bfinance survey showed.
In the midst of volatility during the financial crisis, pension funds have become increasingly active in managing their fund managers. The review was prompted by mainly underperformance, cited by 69% of study’s respondents, followed by strategic or tactical asset allocation adjustments.
Some survey findings: Twenty-three percent of respondents said they plan to increase their target allocations to property over the next 12 months while only 8% predict a cut, illustrating a trend of potentially riskier asset allocation.
Equities also showed positive sentiment, in the short term. While some 28% of respondents are planning to hike equities allocation over the next year, 21% expect to reduce equities over three years. Approximately 16% of those questioned also said they would raise holdings in private equity, and another 16% in commodities.
The findings showed less enthusiasm for hedge fund and fixed income holdings. Only 8% plan to beef up hedge fund allocations during the next six months. Twenty-three percent of schemes expect to cut fixed income allocations over the year while 18% expect to hike.
The survey reflects continuing diversification away from domestic markets with 43% of respondents now planning to move away from national equity holdings compared to 34% in the spring of 2009, according to Reuters. Of the representative investor base polled, 60% were based in Europe, with 40% in the US and Canada. Half of respondents were corporate pension funds, while 27% were public pension plans. The remaining represent insurers, foundations or endowments and family offices.