Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • February 2012
02

Direct alternative asset mandates 'on the increase'

Open-access content Monday 27th February 2012 — updated 5.13pm, Wednesday 29th April 2020

Towers Watson has revealed the number of alternative asset mandates awarded by its clients to direct fund managers continued to increase in most asset classes last year.

2

The number of hedge fund mandates awarded to direct fund managers was nearly three times higher than via fund of funds, which have fallen by two-thirds over the past five years.

At the same time, the number of direct private equity mandates awarded by its clients was nearly four times as many as the number of mandates awarded via fund of fund managers, which have fallen by half over the past five years.

Craig Baker, global head of investment research at Towers Watson, said the past five years had shown how the direct alternative fund managers the company has put into client portfolios can adapt to the changing environment and generate good net-of-fees performances.

'Larger institutional funds are likely to continue to invest directly for most alternative asset classes rather than funds of funds, as investors continue to focus on better fee structures and greater transparency,' he said.

Towers Watson also today highlighted the continued move by investors away from investing in local markets, as they try to diversify their portfolios more globally.

There were half as many UK bond and UK equity searches in 2011 than in 2010, and the company's clients only awarded three UK bond mandates - compared to 28 in 2007. Similarly, the number of manager searches for UK equity managers fell from 12 five years ago to four last year.

At the same time, the number of mandates for US bonds almost doubled last year, and bond mandate selections accounted for $21bn in assets invested last year.

Global mandates were the most popular selections by the Towers Watson clients in terms of equities. They accounted for a third of all equity mandate selections, ahead of US equity and emerging market equity mandates.

Mr Baker said: 'These figures confirm an established trend of investors investing away from local markets, as they seek to diversify their portfolios more globally.'

There was also a 60% increase in the value of assets invested using passive mandates - reaching $16bn last year. 'Indexation and smart beta are playing increasingly important roles in investors' portfolios as many new innovations provide efficient access to markets at lower cost,' Mr Baker said.

'Passive investors can now choose from a range of options to access a number of asset classes, including insurance and emerging market currency, but with the expectation of better risk-adjusted returns.'

Research publishedearlier this month by BlackRock suggested the new Solvency II regulation would prompt insurers to move away from equities and government bonds towards alternative assets.

This article appeared in our February 2012 issue of The Actuary .
Click here to view this issue

You may also be interested in...

2

Investment strategies failing on ESG, says Mercer

Less than one in 10 investment strategies are achieving the highest levels of environmental, social and governance (ESG) performance, according to analysis from Mercer’s Investments business. 
Monday 13th February 2012
Open-access content
2

Rothesay Life reinsures £423m Uniq pension scheme longevity risk

Rothesay Life has reinsured the longevity risk of 20,000 members of the Uniq Pension Scheme in a £423m deal with US firm, Prudential Retirement.
Tuesday 21st February 2012
Open-access content
2

The Actuary - 2012 issue themes and contributor deadlines

Here is your guide to The Actuary's issue themes for 2012. If you are interested in contributing features or other content, you may wish to target particular dates based on this information.
Monday 13th February 2012
Open-access content
2

DB pension deficits still 'stubbornly high'

Pension deficits remained ‘stubbornly high’ in January 2012, with no improvement following the deterioration seen last year, Mercer said today.
Monday 6th February 2012
Open-access content
2

Chinese Actuarial Network UK launched

Report by Dr Yan Liu
Monday 30th January 2012
Open-access content
2

Actuarial careers events attract growing interest

The Actuarial Profession’s careers department ran two promotional events in 2011.
Monday 30th January 2012
Open-access content
Filed in
02
Topics
Investment
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Senior Reserving Analyst

London (City of)
Negotiable
Reference
149485

Senior GI Modeler - Capital and Planning

London (Central)
£ excellent
Reference
149436

Risk Oversight Manager

Flexible / hybrid with a minimum of 2 days per week office-based
£ excellent
Reference
149435
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ