Public Pension Money Managers Opportunistic

Posted by: Mara Der Hovanesian on June 17

There are two kinds of investors in times of market dislocations: those that go running, and those that go gunning.

In a new survey by Greenwich Associates, a research consultant, it seems that managers of public pension funds and endowments have been the opportunistic investors during this particular market downturn.

Almost a quarter of such U.S.-based institutions have put new money into vulture funds and the like, according to the report, looking to “exploit what could be once-in-a-generation opportunities in fixed income, secondary private equity and other asset classes.”

The survey included 152 corporate and public pension funds, endowments and foundations both in U.S. and Canada. Calls were put out last month.

On the other hand, Greenwich analysts find that corporate plan sponsors eschewed such investments while cutting back allocations to U.S. stocks in a "significant" manner, loading up on fixed-income, and paring back exposure to international markets. Goran Hagegard, a Greenwich consultant, says: "They are giving up the potential for long-term investment gains in return for reduced volatility."

Hagregard says it's not clear if the moves signal a long-term shift in priorities, although he adds that the commitment to alternative investments remains strong. He adds that private plan managers tend to be judged on a quarterly basis and so are more attuned to short-term performance metrics.

So who would you rather managing your retirement money?

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BusinessWeek's Adrienne Carter, Jessica Silver-Greenberg, and David Henry deconstruct the mysteries of high finance, Wall Street, and hedge funds for pros and ordinary investors. E-mail them directly if you've got tips about big deals, a hedge fund, or even securities industry gossip.

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