Pensions & Investments – European institutions — led by the U.K. — are expected to raise or change their hedge fund allocations in a bid to improve funding levels while better controlling portfolio volatility, industry observers say.
Hedge fund allocations among pension funds in the U.K. — Europe’s largest pension market by the amount of defined benefit assets and its largest hedge fund market by investment assets — could as much as double in the next several years, sources said. In 2011 alone, the average pension fund allocation to hedge funds jumped to 4.1% — or about £33 billion ($52 billion) — from 2.6%, according to data from the National Association of Pension Funds.
