Pension funds and other institutional investors look set to turn their back on active equity managers as they reassess their strategies in the wake of the market tumult of the past 15 months. (PDF)
A survey of European and North American pension funds conducted in mid- October indicates the industry intends to continue cutting its exposure to equities to free cash to invest in alternatives such as hedge funds, private equity, commodities and property – in spite of the abject failure of many of these asset classes to provide much-vaunted “uncorrelated returns”.
Separately, research by Greenwich Associates suggests institutional investors are increasingly taking the management of their “plain vanilla” equity and bond holdings in-house and ditching their external managers.
Boston Consulting Group’s annual global asset management survey will add to the industry’s gloom by forecasting that actively managed funds will be squeezed even further by passive products such as exchange traded funds in the coming years.