The majority of institutional investors like pension funds are increasing overhauling their portfolios in search of greater returns, with two-thirds having added at least one new asset class over the last three years.

That is according to a global study of investors with around £6trn in assets by consultancy firm bfinance, which finds that private debt, infrastructure and real estate are among the most popular new additions to portfolios.
Almost half of investors have increased their allocations to private markets, although a lack of attractive opportunities and delays in capital calls were cited as reasons for many still being off their long-term targets.
It was also found that, despite greater use of alternative investments, most investors have managed to reduce fees paid to external managers, with only a quarter having seen total costs increase as a percentage of assets.
Fee renegotiation, consolidating mandates with fewer managers, and conducting fee benchmarking studies using external consultants, were mentioned as the main belt-tightening tactics used by investors.
"Asset owners have been remarkably successful at improving overall efficiency while simultaneously adding complexity, illiquidity and new asset classes, as well as overhauling risk management," study author, Kathryn Saklatvala, said.
"However, visible changes of this type should also raise new questions around governance, and specifically, the governance of implementation decisions."
Approximately two-thirds of the institutional investors studied were pension funds, although foundations, sovereign wealth funds, insurers, healthcare institutions, family offices and others were analysed.
It was found that almost a third have moved towards passive management of assets over the past three years, although most investors still expect active management to outperform passive over the next 12 months
Nearly half said active management would be needed for good environmental, social and governance (ESG) considerations, with 39% saying this was a "high priority" for their institution, particularly for large investors.
"There is a gulf between the returns that many investors require and the widespread expectations for what a traditional portfolio may be expected to deliver through the coming decades," bfinance CEO, David Vafai, said.
"With investors making substantial changes to improve long-term risk-adjusted returns, the job of the chief investment officer is getting harder, and successful delivery is becoming increasingly reliant on the quality of implementation decisions."