Corporate Defined Benefit Plans Now Have “Alternatives”

June 20, 2019 | Alternative Investments
https://dailyalts.com/wp-content/uploads/2019/06/5fe5d2474b50b114a6d98074cf213576083edbe35251734e73297b_640.jpg

A survey indicates alternative asset managers see these plans as an emerging opportunity in the near future

Corporate defined benefit plans are generating buzz.

Outsourced chief investment officers (OCIO) are now seeing more responsibility from institutions to identify high-quality investment opportunities and extend their range over asset classes. Research by Cerulli Associates indicates these OCIOs are favorably inclined towards alternative investing given diversification benefits and scope for higher returns.

Corporate defined benefit plans may see higher alt allocations

According to “The Cerulli Edge—U.S. Asset and Wealth Management Edition, June 2019 Issue,” corporate defined benefit (DB) plans are currently underweight on alternative assets, but this could change if OCIOs have their way.

Alternative asset managers are taking their view that alt assets should be “risk-seeking” investments. This runs counter to the idea of alternatives as hedging liabilities.

OCIO providers are now sensing that institutional clients including DB plans will trim equity allocations and lean towards alternative asset classes.

Alternative assets of choice

Cerulli also shows insurance general accounts and corporate DB plans increasingly favor private debt or credit. These assets also go by the name “alternative credit.”

Another Cerulli option is “long-duration infrastructure.” This includes debt or equity from toll roads, transportation, communication infrastructure, and energy-related assets.

The latter may also prove valuable to derisking institutions.

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Shape

Latest Alternative Investment News

https://dailyalts.com/wp-content/uploads/2021/12/51629549260_00312e7f7d_c.jpg
Alternative Investments/Digital: Two Canadian Fund Managers Launch Metaverse Themed ETFs
December 1, 2021     Alternative Investments, Digital Assets, News

Canadian fund managers Horizons ETFs and Evolve Funds have launched the Horizons Global Metaverse Index ETF (“MTAV”) and the Evolve Metaverse ETF (“MESH”) respectively, on the Toronto Stock Exchange.

https://dailyalts.com/wp-content/uploads/2021/12/Solana.jpg
Digital Assets: Grayscale Launches Solana Trust, Protests SEC Rejection Of VanEck Spot Bitcoin ETF
December 1, 2021     Digital Assets, News

Grayscale Investments announced Tuesday the launch of the Grayscale Solana Trust to provide investors with exposure to Solana (SOL), the native token of the Solana network, a smart contract platform…

https://dailyalts.com/wp-content/uploads/2021/12/Jobandtalent_2.jpg
Venture Capital: Digital Temp Staffing Startup Jobandtalent Snags $500M Series E
December 1, 2021     News, Venture Capital

Madrid-based temp staffing marketplace Jobandtalent announced the closure of its Series E raise of $500 million at a valuation of $2.35 billion from Kinnevik and SoftBank Vision Fund 2. Existing…

https://dailyalts.com/wp-content/uploads/2021/12/black-g431352141_640.jpg
FinTech: BNPL Was “One Of The Stars” Of The Holiday Season For PayPal
December 1, 2021     FinTech, News

PayPal (NASDAQ: PYPL) enjoyed solid volumes for its buy-now-pay-later (BNPL) offering on Black Friday, continuing a trend the giant payments fintech observed all through November. In that month, for the…