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September 21, 2010 at 10:32 AM
Nearly two-thirds of pension plans utilize alternative investments, a Sept. 13 SEI Quick Poll found, and their use is increasing. In 2008, 51% of pension plans were invested in alternatives; in 2009, their use increased slightly to 53%. This year, 65% of plans invest in alternatives.
In addition to the increase in plans using alternative investments, executives are investing larger percentages of their portfolios in alternatives. Among plans with over $300 million in assets, 77% have 11% or more invested in alternatives. Forty-two percent of smaller plans have 11% or more invested in alternatives.
The most common alternative investments identified by the poll are real estate (77%), private equity (54%), funds of hedge funds (47%), and single manager hedge funds (30%).
Wealthy investors are more likely to use alternative assets in their pension plans. Eighty-four percent of plans with more than $300 million in assets use alternative investments, compared with 53% of plans with less.
