GREENWICH, Conn. (HedgeWorld.com)–Worldwide pension funds have begun looking to alternative investments as a refuge from the stormy stock markets and Australia is no different, according to Greenwich Associates research.
A fifth of the 166 Australian superannuation funds surveyed by Greenwich said they anticipate increasing their investments in both private equity/development capital and hedge funds by 2004.
According to the survey, Australian pension funds will likely increase their allocation to hedge funds by 21% by 2004. The survey included interviews of industry funds, corporate funds, government funds, non-superannuation schemes and master funds. The results revealed that none of the funds expected to decrease their investments in hedge funds or private equity.
Superannuation funds are reaching for greater alpha, but are also running greater risk, Sandhya Chand, Greenwich’s Sydney-based consultant, said in a statement. A decrease inflow into international equities and the perception of domestic bonds as a less effective long-term investment may be blamed on the increased interest in moving into alternative asset classes, Greenwich concluded.