PENSION FUNDS LOOK TO INCREASE EXPOSURE TO INFRASTRUCTURE AND MAKE LESS USE OF EXTERNAL FUND MANAGERS

New research(1) from FIRST, a leading global events agency, reveals that over the next three years, 73% of pension professionals expect schemes to increase their allocation to infrastructure.    The corresponding figures for hedge funds, private equity and real estate are 31%, 51% and 38% respectively.

When considering these alternative asset classes one in five (20%) pension professionals expect pension funds to reduce their exposure to hedge funds between now and 2019, compared to 13% who think this about private equity.  The corresponding figures for real estate and infrastructure are 9% and 5% respectively.

One of the main reasons for increasing their exposure to alternatives is that pension funds may be looking for better returns, as the research reveals that 42% expect defined benefit pension deficits to increase over the next three years, compared to one in three (31%) who think they will fall.

Another key trend identified by the research from FIRST is that 20% of pension professionals expect schemes to use external fund managers more over the next five years, and 38% expect to use them less.

Mark Riches, MD FIRST – UK said: “There is considerable change taking place in the pensions industry and this is resulting in more networking as sector professionals look to develop a better understanding of the trends and opportunities facing their schemes.  Quality facetime and interaction between pension fund professionals and their fund managers will continue to play an important role in the industry.”

“Organising conferences in the pensions sector is a big growth market for us. We view live events as a valuable tool to increase communications, build ideas and foster innovation. At FIRST we use our breadth of global expertise to help our clients deliver their important key messages in insightful and memorable ways.”

Over the next 12 months, 24% of pension professionals plan to attend more industry events than they did in the previous 12 months, compared to 16% who plan to attend fewer.  Of those planning to attend more, 36% said it was because with so much change taking place in the sector, networking can be a good way to share ideas. Some 27% said that they need to spend more time meeting consultants, fund managers and regulators who also often attend these events, and the same percentage said it was because of the growing importance of meeting key stakeholders in person.

FIRST, which was founded as First Protocol in 1996, is a global events agency with offices in London, New York, Los Angeles and Singapore. It specializes in the design and delivery of high-quality, live events for some of the world’s most iconic companies, including financial services, aerospace, technology, medical, automotive, media and the non-profit sector. FIRST has worked in the pension industry since 2013.

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