September 2024
20Sep

The Rise of Alternatives

By Juliane Begenau, Pauline Liang & Emil Siriwardane Since the 2000s, U.S. public pensions have shifted their risky investments towards alternative assets like private equity and hedge funds, some more aggressively than others. We explore several explanations for these cross-sectional trends, focusing on those implied by the mean-variance models used by most pensions. Our evidence suggests that the rise of alternatives has been fueled by an increase in their perceived risk-adjusted returns relative to public equities. Pension beliefs are shaped...

September 20, 2024
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20Sep

Canada. PSP Investments’ green assets increased to $64.9BN in fiscal 2024: report

The Public Sector Pension Investment Board has $64.9 billion invested in green assets, compared to $48.9 billion in fiscal 2023, according to the investment organization’s latest sustainability report. It found in addition to green assets, PSP Investments has roughly $11.5 billion in transition assets, defined as investments that have committed to make a substantial contribution to the low-carbon transition through the establishment of public targets and disclosure. Among PSP Investments’ portfolio companies, reported Scope 1 and Scope 2 greenhouse gas emissions data...

September 20, 2024
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19Sep

US. New York City Pensions’ CIO Steven Meier discusses trustees’ attitudes to ESG

For Steven Meier, chief investment officer of the New York City public pension funds, finding alignment – particularly regarding ESG – among the trustees of the five pension plans he manages, is one of the key challenges he faces. The trustees of the five New York City public pension plans diverge in their attitudes to ESG, and one of the key challenges Meier faces is “finding consistency of thought” among these trustees, Meier said this week. Meier’s office manages the New...

September 19, 2024
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17Sep

US. State pension funds significantly beat expected investment returns

The Kentucky Public Pensions Authority (KPPA) announced the average composite return for assets under management was 10.7% for the fiscal year ended June 30, 2024, while insurance trust assets under management earned 11.4%.  All pension and insurance portfolios returned significantly more than their actuarial assumed rates of return, which are 6.5% for all County Employees Retirement System (CERS) pension and insurance portfolios and the Kentucky Employees Retirement System (KERS) and State Police Retirement System (SPRS) insurance trusts, 6.25% for the KERS Hazardous...

September 17, 2024
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13Sep

The world’s largest pension funds – 2024

By Thinking Ahead Institute The global top 300 pension funds is an annual study conducted by the Thinking Ahead Institute, in conjunction with Pensions and Investments. The research highlights high-level trends in the pension fund industry and provides information on how the characteristics of these top funds have changed. Get the report here

September 13, 2024
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13Sep

Beyond the Status Quo: A Critical Assessment of Lifecycle Investment Advice

By Aizhan Anarkulova, Scott Cederburg & Michael S. O'Doherty We challenge two central tenets of lifecycle investing: (i) investors should diversify across stocks and bonds and (ii) the young should hold more stocks than the old. An even mix of 50% domestic stocks and 50% international stocks held throughout one’s lifetime vastly outperforms age-based, stock-bond strategies in building wealth, supporting retirement consumption, preserving capital, and generating bequests. These findings are based on a lifecycle model that features dynamic processes for...

September 13, 2024
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13Sep

UK. Pensions and private capital leaders propose solutions to boost private markets investment

The government should use the upcoming value for money framework to help pension schemes shift their focus from short-term considerations to long-term returns in defined contribution (DC) pensions, leaders from the pensions and private capital industry have said. The British Private Equity and Venture Capital Association (BVCA)-led group advocated for this approach as data had demonstrated that private capital funds generate the highest average returns compared to alternative UK assets. In particular, BVCA analysis revealed that, since 2001, investors in private...

September 13, 2024
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12Sep

US pension fund allocation to private debt falls short of target

US pension funds were below their median target allocation to private debt in August, a reflection of the challenges in analyzing the growing number of private debt participants. The median target allocation across 117 US pension funds was $188 million, while the median actual allocation was $112 million, according to S&P Global Market Intelligence data. This suggests that pension funds had a $76 million median net underallocation to private debt as of Aug. 21. The majority of pension funds analyzed failed to meet...

September 12, 2024
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10Sep

World’s largest pension funds return to growth

The world’s largest 300 pension funds returned to growth in 2023, erasing much of the decline of the previous year. However, the assets of the largest pension funds are still not yet back to their record highs, according to this year’s Global Top 300 Pension Funds report by leading global advisory, broking and solutions company WTW’s Thinking Ahead Institute. The research highlights high-level trends in the pension fund industry and provides information on the changing composition of the top 300 list of...

September 10, 2024
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09Sep

Buoyant markets pump up largest retirement plan assets to $22.6 trillion in 2023

Assets of the world’s top 300 retirement plans increased by 10% in 2023 to a total $22.64 trillion, staging a recovery from their 12.9% decline in 2022, according to the according to the latest annual survey by Pensions & Investments and Willis Towers Watson PLC's Thinking Ahead Institute. The plans benefited from the recovery of markets, which have picked up momentum and generally did better in 2023, said Jessica Gao, London-based director at the Thinking Ahead Institute. “But we still have interest-rate pressure...

September 9, 2024
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