Merrill Lynch releases it’s latest 130/30 survey results this week and reiterates that $1 trillion will be invested in 1X0/X0 strategies by 2011.  While this estimate is in line with earlier prognostications from Merrill, the report’s author says a few of the findings surprised even him.  Number one among those findings is the fact that public pensions seem more enamored with the idea of short-extension strategies than private pension plans.  According to HedgeWorld:

“Public funds now represent 21% of the institutional investors in 130/30 strategies, followed by endowments (19%), corporate pension plan sponsors (13%) and private foundations (11%).

“The fact that corporate pensions accounted for a smaller slice of the 130/30 pie compared to public plans was a bit odd. ‘This was my number one surprise,’ said [Gordon] Latter [the report's author]. It is easier to explain why foundations and endowments occupy a smaller space as they tend to be heavily invested in alternative investments, he said.”

The survey also finds that investors are biased toward long-only managers when it comes to 130/30.  This will surely add fuel to the already rancorous debate over who is better equipped to provide these funds.

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