Institutional investors should increase their allocations to alternative investments to around 35%, while paying better attention to the risk in their portfolios, according to speakers at The Pension Bridge Conference.
Some 350 people attended the conference held April 16-17 at the Four Seasons Hotel in San Francisco.
Consultants and investors, both those addressing the conference and those attending it, noted private equities' significant return contribution to investors' overall portfolio over the past 10 years. And given that boost, some wondered why public pension plans did not increase their allocations to 35% to 40%, which is much closer to endowment alternative investment allocations.
“Go big or go home,” said John Geissinger, New York-based partner at consulting firm Hewitt EnnisKnupp Inc., who was one of the consultants recommending the 35% to 40% range.
His comments took this twist after he started his comments declaring: “Hi, I'm John Geissinger and I am addicted to returns.” (Mr. Geissinger later noted he was not going to go through each of the 12 steps for recovery — at least not during the panel discussion.)
Mr. Geissinger, who is a partner in Hewitt EnnisKnupp's investment solutions group, was speaking on a panel on unfunded liabilities moderated by Gary A. Amelio, CEO of the Santa Barbara County (Calif.) Employees' Retirement Association. Also on the panel were James Slevin, vice president of the Uniformed Firefighters Association and a trustee of the $8.5 billion New York City Fire Department Pension Fund, and Andrew Junkin, Denver-based managing director of Wilshire Associates Inc., Santa Monica, Calif.