The DC future: Are hedge funds the solution?

Tue Jun 19, 2012

The European pensions’ landscape is changing. Joy Dunbar, editor of Absolute UCITS, looks at how hedge and UCITS funds are being used as an investor solution, in the first of a two part series.

By 2030 half the population of Western Europe will be over the age of 50, according to the Oxford Institute of Ageing.

This increased life expectancy has irrevocably changed the pensions landscape – with risk being shifted away from governments, life insurers and employers to individuals.

This has resulted in more defined benefit schemes being closed, and assets into defined contribution have increased.

The statistics clearly highlight how the assets under management into European DC pension schemes have been growing. In 2005 the market was valued at $1.6 trillion (€1.3 trillion) and by 2009 it had grown to $2 trillion (€1.6 trillion), according to Cerulli. The researcher predicts assets will hit $3.5 trillion (€2.8 trillion) by 2015.

The research note explains: "While Europe has not whole-heartedly embraced DC, individual countries are taking steps toward encouraging DC participation. The greatest growth potential is in the UK.

"Anticipated legislative changes on a...

ISSN: 2151-1845 / CDC10004H

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