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U.S. public pensions increases commitments to real assets

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New data shows public pension plans in the United States are increasingly favoring exposure to real assets strategies.

Of new investment commitments announced by U.S. public pension plans during the second quarter 2017 and tracked by eVestment's Public Plan IQ solution, 85 were for real asset strategies.

These were far-and-away the most popular new commitments announced in second quarter 2017. In the context of institutional investing, "real assets" frequently means real estate and land, but can also include other tangible items such as commodities or machinery.

2Q 2017 Public Pension Plan Investment Commitments

Investment Type No. of Commitments
Real Assets

85

Private Equity

68

Private Debt

29

Equity

28

Fixed Income

11

Hedge Fund

11

Multi Asset

11

Private Equity – Fund of Funds

2

1Q 2017 Public Pension Plan Investment Commitments

Investment Type No. of Commitments
Real Assets

70

Private Equity

67

Equity

35

Private Debt

32

Fixed Income

15

Hedge Fund

12

Private Equity – Fund of Funds

6

Multi Asset

6

Hedge Fund – Fund of Funds

2

Real Assets – Fund of Funds

1

 

Real assets held the number one during the first quarter 2017 with 70 commitments respectively, a trend that continued from the last half of 2016 with real assets the top spot during the fourth quarter 2016 and third quarter 2016 as well.

"U.S. public pension plans are continuing to place capital with real assets and private equity funds as they seek to diversify their portfolios and increase exposure to higher return and income-generating asset classes," said Graeme Faulds, eVestment's director of private markets solutions. "The trend is clear for these asset classes: there is likely going to be continued flows of new money in that direction and managers need to be ready for it."

Public Plan IQ follows and collects data and documents on 250 of the largest public pension plans in the United States and thus serves as a unique proxy for trends in the overall public pension industry.

 

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