Institutional Investors

Top performing public pensions rely heavily on alts, says Cliffwater

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Public pensions that increased allocations to alternatives have been largely rewarded in experiencing higher 10-year returns than those with smaller alternative investments, according to a new research paper from Cliffwater.

State pension systems shifted roughly 10% of their assets from public equities to alternatives over the five years ending 30 June 2011, keeping other asset class weights mostly unchanged. This means that alternatives now average 20% of total state fund assets, but individual pension plan allocations vary widely – from 0% to 61% of total assets.

Hedge funds do not seem to play a huge role in this