A global survey of pension funds has revealed that they invested a total of more than $62 billion (€51 billion) in alternative asset classes during 2004.
The survey of 200 global pension fund managers conducted by investment consulting firm Watson Wyatt and Global Investor magazine found that real estate was the most attractive alternative class, drawing almost $30 billion, 49 percent of the global total.
Pension funds committed $17 billion to private equity fund of funds and $16 billion to funds of hedge funds (FoHFs). FoHFs accounted for approximately half of all new money invested in alternative assets globally in 2004, amounting to $81 billion.
Commenting on the survey, Roger Urwin, global head of investment consulting at Watson Wyatt said in a statement: The message of diversification is getting through. Private equity is slowly gaining acceptance among pension funds globally as a logical addition to their portfolios.”
The survey showed that Hamilton Lane Advisors holds the greatest amount of private equity assets under management with a total of $39.3 billion. Pacific Corporate Group has the most sizeable PE fund of funds business with $22 billion under management, according to the report.
Deutsche Real Estate topped the poll as the largest global real estate provider with $57.6 billion under its control. Hedge fund of funds manager Man Investments topped the hedge fund category with $35.5 billion of assets.
The survey approached 200 global fund managers, of whom 125 responded. The ranking was based solely on funds of funds in the private equity and hedge funds arenas, while direct managers were included in the real estate analysis.