For pensions, “absolute return” strategies and other non-core investments are back in style

Feb 9th, 2011 | Filed under: Hedge Fund Industry Trends, Today's Post | By:
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Save for the beehive hairdo, shoulder-touching shirt collars and neon-colored jumpsuits, the vast majority of fashion fads eventually come back in style.

So is the case with alternatives, according to bfinance’s winter 2010 survey released late last month (click here to view the survey), which notes that property, infrastructure, private equity and “absolute return strategies” are not only back in favor but all the rage among pension funds. (Click chart to enlarge.)

It’s a post-2008 feather in the cap for these non-conventional investment strategies, which garnered the most positive sentiment among those surveyed – well over bonds, which are definitely out, and certainly over stocks, which in Frankie Valli-like fashion are still relevant but don’t seem to know when to call it quits (apparently his latest tour in the Miami area was not his best).
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  1. I would love to see a survey that offers five or six definitions of “absolute return ” strategies to see what people think this term means. My perception is that it is quite varied.

  2. there is so much pressure on these funds to perform that managers eventually go back to what has worked in the past and by doing so they push the value of these back up again. it should be noted that this is not an actual increase in interest by anyone other than these funds therefore artificially increasing the interest and the value in them.

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