In the past two years, the number of U.K. pension schemes investing in hedge funds has more than doubled. There has ben a similar increase in the average percentage of assets allocated to them, however more than 80% of the pensions continues to avoid hedge funds. According to the annual survey by the National Association of Pension Funds, 17% of British defined benefit schemes now put money in hedge funds, up from 8% in 2005 and 11% in 2006, with average allocation invested in hedge funds rising to 1.2%, up from 1% in 2006 and 0.6% in 2005.

 

According to the study, hedge funds gained as pension schemes invested less in equities. Though, private equity did not attract any new pensions last year, as the number of U.K. pension schemes remains at 20% for the second year in a row after climbing in 2006 to that mark from 15% in 2005. NAPF also notes that 4% of those polled now invest in commodities, up from 2% in 2006 and a non-measurable amount before that. Three out of five pension schemes in the Kingdom now invest in property, up from 54% in 2006 and 50% in 2005.

 

 

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