Survey finds Aussie super funds are shifting focus to alternative assets

Australian super funds are planning to shift their focus from fixed income towards alternative assets, according to the Asset Allocation Industry Survey conducted recently by Terrapin Australia. Around 90% of institutional investors surveyed–of which almost half were pension funds–said they plan to cut their allocation to Australian fixed income investments, while 57% said they will probably move away from international fixed income investments.

Throughout the next 12 to 18 months, institutional investors plan to boost their commitments to infrastructure (88.5%), private equity (82.8%), direct property (74.1%) and other alternative options (89.2%). More than half surveyed said they plan to increase their allocation to exchange-traded funds and international shares and cash, while cutting commitments to Australian equities, listed property and indexed bonds.

The most popular asset classes include emerging markets, specifically infrastructure and distressed debt in the four BRIC countries (Brazil, Russia, India and China), while few are interested in green investments (16.7%). Fewer than 20% surveyed expressed an interest in liability-driven investments.

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