We’ve read a lot of reports over the past year about how institutional investors are eschewing equities in favour of fixed income and alternative investments. For example, back in February, Pensions & Investments reported:

“Consultants, managers and pension fund executives agree that European pension funds will settle at a much lower equity allocation — unlike the last time, when allocations recovered to previous levels.

In the long term, the allocation to equity will probably settle around 40% (of the total portfolio) rather than around 60%,” said Paul Price, Dublin-based global head of institutional business at Pioneer Investments, which had $213.7 billion in assets under management globally at year-end 2008.”

At around the same time, consultancy Watson Wyatt confirmed this forecast (see chart below from report available here with free registration): More…