Schemes remain too heavily invested in traditional asset such as equities and bonds and should be bolder in their use of alternatives, BlackRock chief executive Larry Fink told delegates on the first day of the National Association of Pension Fund’s Investment Conference.
Fink stressed the importance of thinking beyond traditional investment approaches for the industry to live up to its pension promises and for the industry to work together for the benefit of savers.
“The reality is too many pension funds have not been achieving the returns they need to meet their liabilities. Pension managers will need to take a bold approach in order to meet liabilities with a greater willingness to explore alternatives such as hedge funds and to explore more flexible, non-traditional bond funds.”
Fink warned however that while institutional investment in alternatives had grown by 60% over the last five years, prices and rates were now similar to those last seen in 2007.
“Alternative asset classes are a great place to diversify in, but not all alternatives are the right place right now.”
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