Investors

Alternative assets managed by the world’s top 99 investment managers on behalf of pension funds grew by 40 percent over the past year, according to consulting firm Watson Wyatt.

Alternative assets managed by the world’s top 99 investment managers on behalf of pension funds grew by 40 percent over the past year, according to consulting firm Watson Wyatt. Real estate managers occupied the top nine positions, managing 62 percent of pension fund assets.

The Dallas-based business is in the middle of building a pan-European portfolio of hotels for a fund that has now deployed 50 percent of its capital.

The New York Common Retirement Fund, the third largest in the US, has made public recent commitments to CVC Capital Partners’s recently closed mega-fund and Leichtman Capital Partners mid-market fund, which is targeting $1bn.

The number of funds targeting less than $1 billion of equity commitments has increased by almost one fifth to 128 in the first quarter of this year, with managers’ focus firmly pointed towards Asian real estate, according to research by New York-based fund of funds Clerestory Capital Partners.

CITIC CapitalLand Business Park Fund has closed on $72.5m, having raised money from domestic Chinese institutional investors. It is the first private equity real estate fund to be denominated in Yuan.

Private equity firms must better voice the benefit of their activities to pensioners in order to combat assaults by unions, such as the US’ SEIU, New Mountain Capital managing director Michael Flaherman told the PEI Investor Relations and Communications Forum in New York today.

The California pension saw its alternative investment program return 5.3 percent, while public equities languished. Real estate investments returned 1.6 percent for the pension.

Speaking at the PERE Forum: Europe 2008 Nori Gerardo Lietz, chief strategist of Partners Group, warned that investors want a choice about where to deploy their capital and that it could come at the expense of global real estate vehicles.

The private equity firm’s latest global buyout fund, targeting an estimated $20bn, now reportedly counts China’s State Administration of Foreign Exchange as a substantial investor.