DB schemes still keen on insourcing, private equity – State Street
A strong trend toward greater internal management is among the key findings of a global survey of defined benefit (DB) pension funds carried out for State Street Global Services.
Conducted by Longitude Research, the manager’s 2015 ‘Asset Owner Survey’ shows that half of the 400 respondents planned to increase their internal risk and investment teams – by 48% and 45%, respectively – over the next three years.
The move toward greater internal management is not restricted to the larger players, with funds having as little as £4bn (€5.5bn) in assets also understood to be embracing insourcing.
However, the survey also revealed a desire to partner more with asset managers.
More than one-third of the interviewed schemes are in deficit (37%), and 3% of those believe it will take them more than 20 years to close this.
Meanwhile, alternative assets continue to draw pension funds, according to the survey, with nearly half (48%) of respondents planning to increase their exposure to private equity over the next year.
This is partly motivated by the pursuit of returns and partly by tail-risk diversification.
More information about the survey and its results will be forthcoming in the new year.
Last year’s survey was carried out by the Economist Intelligence Unit.