Quantitative easing measures introduced by the UK’s Bank of England aimed at kick-starting the local economy have had the unintended consequence of pushing up UK pension scheme liabilities.
The $59 billion New Jersey Division of Investment, has made several changes to its alternatives investment portfolio including a slowdown in new commitments, on the back of a belief that large institutions with high allocations to alternatives will be forced to sell portions of their portfolios in order to raise liquidity and rebalance their overall asset allocations.
Five consecutive days leading into March were the most volatile on record for UK final salary pension schemes since accounting standards were changed in 2001, reflecting the risks associated with funding dependence on investment markets.
While the net asset values (NAVs) of private equity funds have been spared the steep declines taken by major indexes, the reporting lags inherent in private equity fund valuations should unveil double-digit losses for the first half of 2009.
A number of Ivy League universities – including Yale, Cornell and the University of Pennsylvania (Penn) – are directly feeling the affects of the negative performance of their endowment funds, and are being forced to cut operating budgets for the 2009/10 financial year.
Despite recent investment losses, sovereign wealth funds (SWFs) collectively grew by 18 per cent in 2008, bringing the sum of assets held by the vehicles to US$3.9 trillion, a report from International Financial Services London (IFSL) found.