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72859 Matching News Items

1.  A First Look at Alternative Investments and Public Pensions (PDF)
Center for Retirement Research at Boston College Link to more items from this source
July 5, 2017
"Public pension plans have boosted their holdings in alternative assets, defined as private equity, hedge funds, real estate, and commodities. This shift reflects a search for higher returns, a hedge for other investment risks, and diversification. The question is how the shift has affected returns and volatility over two periods: 2005-2015 and 2010-2015. In terms of returns, a 10-percent increase in the average allocation to alternatives was associated with a reduction of 30-45 basis points, primarily due to hedge funds. In terms of volatility, alternatives did not have a statistically significant effect. Hedge funds reduced volatility, but real estate and commodities increased it."
2.  A First Look at Alternative Investments and Public Pensions (PDF)
Center for State & Local Government Excellence Link to more items from this source
June 29, 2017
17 pages. "Public pension plans have boosted their holdings in alternative assets, defined as private equity, hedge funds, real estate, and commodities. This shift reflects a search for higher returns, a hedge for other investment risks, and diversification.... [A] 10-percent increase in the average allocation to alternatives was associated with a reduction of 30-45 basis points, primarily due to hedge funds.... Hedge funds reduced volatility, but real estate and commodities increased it."
3.  Public Pension Investment Update: Have Alternatives Helped or Hurt? (PDF)
Center for Retirement Research at Boston College Link to more items from this source
Nov. 22, 2022
"In FY 2022, public pension plans experienced negative asset returns, and some say it could have been even worse without alternative investments. But the real question is have alternatives (private equity, hedge funds, real estate, and commodities) helped or hurt over the long term? The results suggest that, from 2001-2022, alternatives have not helped overall returns -- although they may have reduced volatility."
4.  Widespread Increase Expected in Risk Appetite Among Pension Funds Along with Increased Allocations to Alternatives
State Street Corporation Link to more items from this source
Nov. 18, 2014
"[O]ver the next three years, 77 percent of pension funds expect their appetite for investment risk to increase to enable them to meet long-term liabilities and deliver optimal value for members ... One in five (20 percent) of the asset owners surveyed expect their risk appetite to increase significantly during this period.... Private equity is of the greatest interest to respondents in the Americas, with 68 percent planning to increase their allocation, compared to 60 percent in Europe, Middle East and Africa and only 45 percent in the Asia Pacific region."
5.  Public Pensions May Have Grown Addicted to High-Risk Alternative Investments.
BusinessWeek Link to more items from this source
Sept. 10, 2007
Excerpt: New mexico's public pension plan is sinking deeper and deeper into a hole. Over the past four years, it has accumulated a $937 million deficit. That's bad news for the state workers who are depending on the fund to pay for their golden years. In hopes of boosting returns, last year the state legislature gave managers the authority to put money into alternative investments such as real estate, private equity, and hedge funds.
6.  Due Diligence for Hedge and Private Equity Funds: Avoiding the Pitfalls with Alternative Investments for Institutional Investors and Fund Managers (PDF)
Pension Risk Matters Link to more items from this source
June 10, 2013
64-page slide presentation (June 5, 2013).
7.  Corporate Pension Funds Look to Alternative Investments for Funding Boosts
CFO Link to more items from this source
Oct. 4, 2010
Excerpt: Alternative investments, such as hedge funds, private equity, and real estate, are slowly gaining sway with corporate pension fund managers.
8.  Canadian Pension Plans See Investing Opportunities in Alternative Assets
The Globe and Mail Link to more items from this source
Sept. 20, 2012
"A soaring number of Canadian pension plans are shifting their investment strategies this year to embrace real estate and other alternative assets as they struggle to cope with the challenges of a world with entrenched low interest rates. A [recent] survey ... suggests a majority of plans have given up waiting for higher interest rates -- which would boost returns and reduce their long-term funding liabilities -- and are making structural changes to their investment approach."
9.  Alternative Investments Gaining Share in Corporate Pension Portfolios, According to New Surveys
CFO Link to more items from this source
Sept. 16, 2010
Excerpt: Alternative investments, such as hedge funds, private equity, and real estate, are slowly but surely gaining sway with corporate pension fund managers. A recent survey by J.P. Morgan Asset Management of about 150 corporate pension plans found that alternative investments constitute about 11% of their assets, on average, and that the plans intend to increase that allocation to 14% within the next three years.
10.  IMF Says U.S. Public Pension Funds Increasing Risk to Dangerous Levels in Search of Yield
Pensions & Investments Link to more items from this source
Apr. 17, 2013
"The Global Financial Stability Report states that vulnerabilities are growing in the U.S. credit markets while pension funds and insurance companies are moving into more risky assets.... Public DB plans have gone from fully funded in 2001 to a 28% shortfall at the end of 2012. In that same time period, weaker funded plans have increased their allocations to alternatives to 25% from virtually zero, which exposes plans to more volatility and liquidity risks, according to the report."
11.  GAO Report: Guidance Needed to Better Inform Defined Benefit Pension Plans of the Challenges and Risks of Investing in Hedge Funds and Private Equity
U.S. Government Accountability Office [GAO] Link to more items from this source
Sept. 11, 2008
71 pages. "[GAO was asked to examine [1] the extent to which defined benefit pension] plans invest in hedge funds and private equity; [2] the potential benefits and challenges of hedge fund investments; [3] the potential benefits and challenges of private equity investments; and [4] what mechanisms regulate and monitor pension plan investments in hedge funds and private equity. To answer these questions GAO interviewed relevant federal agencies, public and private pension plans, industry groups and investment professionals, and analyzed available survey data." [GAO-08-692, published Aug. 14, 2008, released Sept. 10, 2008]
12.  The Big Squeeze: Big Bucks Paid to Alternative Investment Managers While Pension Deficits Get Worse
Pension Pulse Link to more items from this source
May 24, 2017
"[A] select few hedge fund and private equity titans have greatly benefitted from this shift into alternative assets, amassing extraordinary wealth, while U.S. public pension funds keep sinking deeper into a pension albatross, failing to deliver on these and other investments. Still, despite this reality, US pensions are rushing to invest more into alternatives, fearing a big downturn ahead.... The problem isn't paying fees when risk-adjusted performance is met. The problem is paying big fees for subpar or average returns in a low-return environment over a long period as your pension deficit gets worse."
13.  How Public Pension Funding Practices Can Lead to Significant Underfunding or Significant Contribution Increases When Plans Invest in Risky Assets (PDF)
Rockefeller Institute Link to more items from this source
June 6, 2016
43 pages. "[The authors] have developed a model to evaluate pension risks under different funding policies and investment return scenarios. [They] find that while the most-common funding policies and practices reduce contribution volatility, they increase the likelihood of significant underfunding. Funding policies are unlikely to bring underfunded plans to full funding within thirty years, even if investment-return assumptions are met every single year and employers make full actuarially determined contributions."
14.  Text of EBSA Information Letter 2020-06-03: Use of Private Equity Investments as Designated Investment Alternatives in Individual Account Plans
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL] Link to more items from this source
June 3, 2020
"[A] plan fiduciary would not, in the view of the [DOL], violate the fiduciary's duties under section 403 and 404 of ERISA solely because the fiduciary offers a professionally managed asset allocation fund with a private equity component as a designated investment alternative for an ERISA covered individual account plan in the manner described in this letter. There may be many reasons why a fiduciary may properly select an asset allocation fund with a private equity component as a designated investment alternative for a participant directed individual account plan. Private equity investments, however, present additional considerations to participant-directed individual account plans that are different than those involved in defined benefit plans. In making such a selection for an individual account plan, the fiduciary must engage in an objective, thorough, and analytical process that compares the asset allocation fund with appropriate alternative funds that do not include a private equity component, anticipated opportunities for investment diversification and enhanced investment returns, as well as the complexities associated with the private equity component."
15.  Pension Funds Globally Increased Hedge Fund Allocations in 2015
Pensions & Investments Link to more items from this source
Feb. 23, 2016
"The median allocation by European pension funds rose ... to 7% from 4%, while the median allocation by North American (including Latin America) pension funds increased by two percentage points to 10%, and the median allocation by Asia-Pacific plans rose to 5% from 3% the previous year.... [On] a global basis, pension funds' median allocation to the broad alternatives investment category was 18%, and 8% in hedge funds specifically."
16.  State Street Finds Pension Funds Willing to Increase Risk Profile
Financial Post Link to more items from this source
Mar. 26, 2015
"[T]hree-quarters of [survey] respondents expect to increase their risk appetite. They will do that by 'making a major shift in allocations to less-familiar asset classes such as alternatives to drive growth and meet long-term liabilities.' And the funds will pursue that goal by placing 'big bets on alternatives,' a group of assets that includes hedge funds, private equity, direct loans, infrastructure and real estate."
17.  GAO Report: Recent Developments Highlight Challenges of Hedge Fund and Private Equity Investing by Defined Benefit Pension Plans
U.S. Government Accountability Office [GAO] Link to more items from this source
Mar. 19, 2012
48 pages. "As requested, to better understand plan sponsors' experiences with these investments, GAO examined [1] the recent experiences of pension plans with investments in hedge funds and private equity, including lessons learned; [2] how plans have responded to these lessons; and [3] steps federal agencies and other entities have taken to help plan sponsors make and manage these alternative investments." [GAO-12-324, published Feb. 16, 2012, released Mar. 19, 2012]
18.  Public Pension Funds Likely to Ignore IMF Warnings of Excessively Risky Investments
Pension Pulse Link to more items from this source
Apr. 18, 2013
"Is the IMF right to warn U.S. public pension funds of the risks of plowing into alternatives which include real estate, private equity and hedge funds? Yes but this warning will fall of deaf ears. The reality is most U.S. public pension funds suffering from chronic deficits and still holding on to their rate-of return fantasy are increasingly betting on alternatives to get them out of their pension hole."
19.  States, Other Government Bodies Are Increasing Investment Risk to Raise Public Pension Fund Returns
MSNBC Link to more items from this source
Mar. 10, 2010
Excerpt: Companies are quietly and gradually moving their pension funds out of stocks. They want to reduce their investment risk and are buying more long-term bonds. But states and other bodies of government are seeking higher returns for their pension funds, to make up for ground lost in the last couple of years and to pay all the benefits promised to present and future retirees.
20.  Hedge Fund Due Diligence for Retirement Plans (PDF)
PwC Link to more items from this source
Sept. 11, 2012
"Retirement plan sponsors are giving alternative investments, including hedge funds and private equity funds, a closer look -- due to the lower historical volatility, higher returns and varied correlations offered when compared to traditional investments. In addition to performance, plan sponsors are also seeking increased levels of information on their operational complexities in order to address the total risk (investment and operational) funds pose to pension assets. Alternative investment managers must recognize the holistic nature of additional information data requests in order to promptly and effectively satisfy the increased transparency requirements of institutional investors."
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