Institutional investors have put more of their assets into alternative strategies during the first half of 2006, according to Eager, Davis & Holmes' midyear Tracker report on U.S. institutional hiring activity.
A record 42% of managers hired by pension funds that release public information about their hiring decisions — predominantly public retirement funds, with some Taft-Hartley funds and endowments and foundations as well — were managers of alternative strategies such as hedge funds and private equity, and 32.9% of all assets placed went to those managers, said David Holmes, partner. Last year, alternatives accounted for 38% of mandates awarded and 26% of assets placed; that compares with 26% of mandates and 15% of assets placed in 2004, and 17% of mandates and 7% of assets placed in 2003.
For the six months ended June 30, 17% of mandates and 12% of assets placed went to active U.S. equities, compared with an average of 32% of mandates and 19.4% of assets placed for the five-year period. No numbers were available for fixed income.
Pension consultants that have strong alternative research efforts — including Callan Associates, Wilshire Associates, Ennis Knupp, New England Pension Consultants and Pension Consulting Alliance — have gained significant share in advising on manager search and asset mandates over the past six quarters, according to a news release from Eager, Davis & Holmes.