UK – Trustees in the UK must guarantee they have a sufficiently robust governance structure to be able to take advantage of the evolving alternatives market, a report by UBS Global Asset Management has said.

Noting the previous trend towards alternative assets in the 2013 edition of its Pension Fund Indicators report, the Swiss asset management division said pension investment in the area had “stabilised”, according to Office of National Statistics data.

However, the report sought to highlight the opportunities available from bank deleveraging, with a funding shortfall of £24bn (€28bn) in domestic commercial mortgages.

“This market environment presents unprecedented market opportunities for non-bank real estate debt providers and investors,” the report said.

It continued that bank deleveraging had also created opportunities in the infrastructure market that others could fill.

“Infrastructure debt has the capacity to deliver the combined benefit of real asset exposure, longer duration cashflows and potentially superior risk characteristics,” it said.

Despite the supposed opportunities for institutional investors to start lending directly to the market, Société Générale Cross Asset Research recently said the market was unprepared to step in.

However, a report by the Bank of England released earlier this month noted that lending to small and medium-sized enterprises (SMEs) was beginning to increase – “albeit from low levels” – due to the involvement of institutional investors including pension funds.

UBS went on to say that direct lending – both commercial mortgages and infrastructure – were only the latest opportunities “in an ever-evolving range of alternative investments”.

“We expect to see more and more such products made available as market dynamics lead to opportunities for the canny investor,” the report said.

“The challenge is to have a robust enough governance structure to take advantage of these investments.

“For those that do, the benefit could be quite significant.”