International equity assets under management among U.S. institutions grew roughly 30% during 2004 to about $620 billion, according to a new report issued by Greenwich Associates. The report attributed the growth to performance gains in many foreign stock markets and currency appreciation abroad. U.S. institutions increased international equity allocations to an average of 13% of total assets for 2004. Institutions held steady for several years prior to that, with about 11% of assets allocated to international equity.
"U.S. pension funds are under significant pressure to generate alpha, and there is a widespread perception among institutional investors that overseas stocks are undervalued," Greenwich consultant John Webster said in the report.
The firm interviewed 157 international equity managers and 82 international equity traders between Nov. 29 and Feb. 18.