Asian pension funds to boost alternatives exposure - survey

More than half of the Asia-based pension funds surveyed by State Street said they plan to increase private equity exposure. A similar proportion intend to allocate more to infrastructure. These numbers are higher than the global total, with 46% of pension funds intending to boost private equity allocations and 41% set to up commitments to infrastructure.

Of the Asia-based defined benefit respondents - programs where responsibility for meeting pension obligations lies with the employer and liabilities are held on the balance sheet - 42% are in deficit. This underlines the pressure created by ageing populations and hence the desire to add exposure in potentially higher return areas such as private equity.

However, only one fifth of respondents believe their trustee boards or equivalent are able to address longer-term, strategic factors affecting a portfolio, while only a third say they fully grasp the risks associated with investments in alternative assets. Furthermore, just 6% say they can manage liquidity risks effectively.

The survey covered 400 pension fund professionals globally, with one quarter based in Asia. The Asian contingent is under pressure to cut costs and more than half of respondents are considering pooling assets over the next three years to improve operational efficiency.

Meanwhile, an overwhelming majority of Australian and Japanese pension funds expressed an interest in making investments tied to environmental, social and governance (ESG) issues. Many intend to hire managers dedicated to ESG to formulate strategies in this area.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• LPs
• Fundraising
• Asia
• LPs
• Fundraising