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Hedge funds fail to catch on Back  
Irish pension funds are failing to allocate to alternative assets such as hedge funds, private equity and currencies, according to a new report from the Irish Association of Pension Funds (IAPF).

The report, ‘Investigation of Trends in Pension Scheme Investment’, which is based on a survey carried out by the IAPF’s investment committee, says that alternative assets are ‘generally unpopular’ with the trustees of defined benefit pension funds in Ireland

‘A lack of understanding in investment and risk concepts may be restricting the ability of many pension schemes to manage their assets in the most appropriate manner,’ the IAPF said.

Helen Keelan of Intel, who chairs the investment committee, said, ‘The general lack of understanding of investment issues includes some trustees of defined benefit (DB) schemes who appear reluctant to get involved with more complex, modern investment strategies, such as investing in alternative assets’. ‘Such alternatives could benefit their schemes by helping to maintain overall returns of their pension fund whilst at the same time improving their level of risk diversification,’ she adds.

However, despite the reluctance to allocate to alternatives, the report states, that, ‘defined benefit schemes have made considerable progress in recent years with much greater awareness of risk and a move towards bespoke investment strategies’.

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