Most U.K. pension plans expect to increase their investments in Asian equities over the next 10 years, either through external long-only managers or through hedge funds, according to a new survey by Baring Asset Management.
Currently, while an average of 60% of their total assets are in equities, only 7% are allocated to Asian equities, including Japan, according to the survey of 18 of the top 40 U.K. plan sponsors, representing a combined £93 billion ($170 billion) in assets. One third of respondents said they would consider investing in Asian equities through hedge funds.
"People are understandably nervous about the exposure to emerging markets, given history and politics," explained Michael Hughes, CIO at Baring Asset Management. "The hedge fund structure can provide some degree of risk protection."