The proportion of UK pension scheme assets allocated to real estate has halved, according to a survey conducted by the National Association of Pension Funds (NAPF).
Of the £400 billion (€440 billion; $663 billion) of assets held by the schemes surveyed, only 3.9 percent was allocated to the asset class, compared to 7 percent in 2008.
As many schemes have shifted their allocations in favour of fixed interest assets and corporate bonds, both of which have seen increases compared to other asset classes, private equity and real estate have both seen reductions.
The proportion of total assets allocated to private equity dropped by more than half to 1 percent this year compared to 2.5 percent last year or 1.7 percent in 2007.
Large fluctuations in the value of assets such as real estate, which were previously viewed as low-risk, have caused some 21 percent of schemes to review the investment options they offer their members, said the report.
In the last year some schemes have withdrawn from the private equity asset class altogether. Last year 24 percent of schemes had some sort of private equity or venture capital exposure. The figure this year has dropped to 21 percent.
However, the survey also stated that those schemes that maintained their exposure to private equity increased on average their allocation from 3.7 percent last year to 4.8 percent in 2009.
This trend was mirrored in real estate, where the proportion of schemes investing the asset class dropped from 64 percent to 61 percent.
The overall capital allocation to infrastructure remained steady at 0.5 percent.