GREENWICH, Conn. (HedgeWorld.com)–In 2002, U.S. pension funds and endowments recorded their steepest decline in the last three years, possibly the most destructive year in the history of the U.S. fund business, according to Greenwich Associates, a research and consulting firm.
Corporate pension funds were hardest hit, losing on average 14.6% over the year. Public funds had average asset losses of 9.3% from 2001 to 2002. Meanwhile endowments and foundations fared the better, losing 6.3% of their value over the same time frame.
“Looking at the asset mix differences between fund types gives you a sense why they performed differently in the current market,” John Webster, consultant at Greenwich, said in a statement.
What might have worked in the favor of endowments is the fact that they tend to be heavily invested in alternative asset classes, especially in hedge funds. At the same time, Greenwich said that investment in U.S. equities is falling sharply in terms of being proportional to other asset classes. Domestic equity investment fell to 46.8% from 49.4%.