The largest 1,000 retirement plans in the US saw strong growth rates in the 12 months ended September 30, growing 13.5 percent during the period, according to Pensions & Investments.
P&I’s latest survey also found the largest defined benefit plans have substantially increased their allocations to alternative investments such as hedge funds and private equity, during the 12-month period. In contrast, allocations to US stocks by the top 1,000 fell to 40.7 percent of total assets from 43.7 percent the year before. US fixed-income allocations fell to 23.9 percent from 25.4 percent.
The 200 largest defined benefit plans, representing $5.6 trillion (€3.8 trillion) in total assets, significantly increased investments to private equity. Buyouts had the biggest growth, increasing 53 percent to $108.4 billion. Distressed debt investments rose 27 percent to $10.5 billion while venture capital grew 20 percent to $28.5 billion. Significant allocations by pension funds were also made to commodities and infrastructure.
Equity investments directed to real estate increased 13.5 percent to $170.3 billion. The prior year, real estate equity assets grew 30 percent. But investments in international real estate saw the biggest jumped, increasing 96 percent to $15.7 billion, a sign that US pension funds are starting to target foreign real estate.