Alternative Investments Becoming Mainstream

Date: Tuesday, December 4, 2007
Author: Craig Sebastiano, Benefits Canada

Pension funds, endowments and foundations expect to dedicate an even larger slice of their total investment portfolio to private equity, hedge funds and real estate, according to a report.

The 2007-2008 Russell Investments Survey on Alternative Investing finds that as a percentage of total fund assets, institutional investors in North America, Europe, Japan and Australia expect increases in all of these alternative investments, with the one exception of Australian institutional investors keeping their mean strategic asset allocation to hedge funds steady.

“Describing the use of private equity, hedge funds and real estate as ‘alternative’ is increasingly a misnomer in today’s sophisticated investment environment,” says Jon Bailie, Russell’s managing director, alternative investments. “Fund of funds remain the preferred route to access both private equity and hedge funds, with limited in-house investment resources dedicated to these strategies by even the world’s largest institutions.”

The results are based on responses from 326 organizations worldwide.

For more about alternative investments, click here to check out our special section, A Trustee’s Guide to Alternative Investments.

To comment on this story, email craig.sebastiano@rci.rogers.com.