News: Alternative assets still a major pull for pension funds.

Pensions Week, March, 2008

Byline: David Rowley

Pension funds continued to diversify their assets over 2007 with alternative classes increasingly favoured, according to Watson Wyatt.

UK pension funds advised by Watson Wyatt last year increased their allocation to hedge funds by over 60% compared to the previous year, while real estate mandates grew 50% from 2006, and around two-and-a-half times more than 2005.

Paul Trickett, European head of investment consulting at Watson Wyatt, said: "Hedge funds remain a good way to capture both manager skill and ensure diversification.

"However, the burden of governance should be very well assessed before deciding on which strategy to choose. While funds-of-hedge funds continue to be popular, single strategies are fast...

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