Many of the nation's largest endowments — including Harvard, Yale, Princeton, Northwestern and the University of Chicago — have sizable allocations to real assets, which usually include real estate, timber, energy and commodities. The allocations are usually well north of 10% and can be as high as 20%. U.S. defined benefit pension funds have been invested in real estate for a long time, but still have only minor allocations to timber, energy and commodities. In the latest P&I survey of the largest U.S. plan sponsors, the combined total of those asset classes was only $32.75 billion (total DB assets were $3.693 trillion). Given U.S. pension funds' now seemingly widespread acceptance of hedge funds, one wonders if real assets will be next.
To see a full list of the largest U.S. DB funds' investments in real assets, visit the P&I Research Center.