Pension Funds Look to Ramp Up “Insourcing”: Report

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Almost half of the world’s pension funds are looking to add talent to their internal investment teams in the near future, according to a State Street report.

The State Street 2015 Asset Owner Survey interviewed 400 pension executives across 20 countries.

More on insourcing, from the report:

Funds are ramping up their internal specialist talent, with nearly half planning to increase their internal risk teams (48%) and investment teams (45%) over the next three years, particularly as they gear up for increased ESG investing.

However, funds will remain reliant on external partners with 65% of all funds agreeing that their consultants are essential to guiding their investment process.

[…]

In an effort to gain returns, funds will continue to diversify investment strategies. 83% expressed moderate or high interest in environmental, social and governance (ESG) investments. Of those interested in ESG, 80% of respondents in North America and 78% of respondents in EMEA say they are more likely to appoint a manager with ESG capabilities.

Alternatives are seen as key to boosting returns. Fund of hedge funds and real estate emerged as favorites, with 51% and 50% of funds planning to increase investments, respectively. Yet 46% say they lack transparency on the risks stemming from alternatives.

Download the full report here.

 

Photo by  Dirk Knight via Flickr CC License

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