Pension funds are in the money. Global institutional pension fund assets in the 13 major markets grew by 4% during 2011 to reach a high of US$28 trillion, up from US$26 trillion in 2010 according to consultancy Towers Watson’s Global Pension Assets Study. The growth is the continuation of a trend which started in 2009 when assets grew 17%, and in contrast to the 21% fall during 2008 which took assets back to 2006 levels. Global pension fund assets have now grown at over 6% on average annually since 2001, when they were valued at US$15 trillion, writes the study.
But inspite of this growth in assets, the report states that pension fund balance sheets weakened globally during 2011, with the ratio of global assets to liabilities well down from the peak achieved in 1999 underlining the importance of the right asset allocation strategy.
Carl Hess, global head of investment at Towers Watson, said in the report: “The last six months of 2011 have driven home the need to have investment strategies that are flexible and adaptable and which contain a broader view of risk. This approach makes greater allowance for extreme events, which are occurring more frequently, while accommodating the softer elements of risk, such as credit and liquidity.”
According to the report, allocations to alternative assets including real estate, hedge funds, private equity and commodities, have grown from 5% to 20% since 1995. The report also cites that in the past decade most countries have increased exposure to alternative assets with the US witnessing the greatest boost (from 5% to 25%), followed by Switzerland (9% to 28%), Netherlands (1% to 14%), Australia (14% to 24%) and Canada (10% to 20%).
Hess adds: “The volatility in markets and the heightened risk awareness associated with possible sovereign defaults continues to make asset allocation incredibly challenging as companies and trustees balance such priorities as long-term de-risking, short-term market opportunities, rebalancing or maintaining a strategic asset allocation mix.” He says these are complex decisions which are increasingly being delegated to specialists such as fiduciary managers.
If you are keen to enter this trillion dollar industry and have a strong background in private equity asset management then this week’s position as manager of pension investments for a $23 billion global enterprise could be for you. Scroll down to find out more.
***Job of the Week***
Job Title: Manager of Pension Investments
Company: Xerox Corporation
Location: Norwalk, CT
Firm Description: Xerox Corporation is a $23 billion global enterprise for business process and document management. Headquartered in Norwalk, Conn., Xerox’ 140,000-strong team serve clients in more than 160 countries.
Xerox’s Trust Investment team is looking to hire a manager of pension investments. This position will be located at Xerox headquarters in Norwalk, CT.
Job Description (as cited by Xerox Corporation):
– Assist and backup the director, pensions
– Support ongoing due diligence and review of all external pension investment managers
– Support search activities for new external investment managers and/or strategies
– Manage private equity and private real estate portfolio monitoring, including cash flow analysis, payment authorization (cap calls/distributions/debt changes) and IRR evaluation
– Monitor performance of currency hedge manager and provide monthly updates to currency exposures to maintain appropriate hedge
– Prepare quarterly performance summary memo for director, pensions and CIO
– Assist in preparation and documentation for the investment committee meetings
– Prepare analysis and reports on the performance of any hedging derivative strategies
– Prepare weekly summaries of external market research reports and economic indicators
– Stay current on investment trends for pension plans and current markets to help make recommendations for new opportunities and possible changes
– Support Canadian pension and savings plan asset management
– Perform ongoing due diligence and monitor performance on a monthly basis
– Participate in and document regular investment manager review meetings
– Participate in manager search process, as needed
– Report to director, Pensions on manager and plan performance and/or issues
– Prepare manager and plan performance materials for quarterly pension committee meetings
– Review established benchmarks by asset class and manager to ensure ongoing relevance to current mandates
Qualifications/Experience: (as cited by Xerox Corporation ):
– Bachelor’s degree and MBA or CFA
– 5 – 7 years + experience in pension or investment management or consulting
– Extensive knowledge of pension investment programs
– Knowledge and experience in working with investment managers, investment consultants, trustees and record keepers
– Strong oral and written communication and analysis skills
To apply click here
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Image credit: Photo of pension money pot courtesy of Shutterstock