The Markets July 11, 2016

Pension Fund Assets One-Third of Top Alternative Managers' Assets

Real estate continues to be the top alternatives pick for pension funds.
Reported by

Total assets managed by the top 100 alternative investment managers globally reached $3.6 trillion, up 3% from the prior year, according to Willis Towers Watson.

The research, which includes data on a diverse range of institutional investor types, shows that pension fund assets represent one-third (34%) of the top 100 alternative managers’ assets, followed by wealth managers (19%), insurance companies (10%), sovereign wealth funds (6%), banks (2%), funds of funds (FoFs) (2%), and endowments and foundations (2%).               

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

Of the top 100 alternative investment managers, real estate managers have the largest share of assets (34% and more than $1.2 trillion), followed by hedge funds (21% and $755 billion), private equity fund managers (18% and $640 billion), private equity funds of funds (PEFoFs) (12% and $420 billion), funds of hedge funds (FoHFs) (6% and $222 billion), infrastructure (5%) and illiquid credit (5%).

Pension fund assets, managed by the top 100 asset managers of pension funds, increased again from the year before to reach almost $1.5 trillion. Real estate managers continue to have the largest share of pension fund assets with 40%, followed by PEFoFs (20%), hedge funds (10%), private equity (9%), infrastructure (8%), FoHFs (7%) and illiquid credit (4%).

“The alternative asset management industry continues to be remarkably reliant on pension fund money and has earned a position of trust by delivering diversified returns via some of the most highly skilled investment teams around,” says Brad Morrow, head of manager research, North America, Willis Towers Watson. “However, there’s an ever-increasing demand for more alignment and lower cost.”

The research shows, among the top 100 managers, that North America continues to be the preferred destination for investment in alternative assets (50%), with illiquid credit and infrastructure being the only asset classes where more capital is invested in Europe. Overall, 37% of alternative assets are invested in Europe and 8% in Asia Pacific, with 5% throughout the rest of the world.

The research also lists the top-ranked managers in each area by assets under management (AuM). The research report may be downloaded from here.
Compliance July 8, 2016

Benefits Interference Claims Against Allstate Move Forward

After 16 years, a court has consolidated and moved forward ERISA claims of agents who had their employment status changed by Allstate.
Reported by

The U.S. District Court for the Eastern District of Pennsylvania has moved forward Employee Retirement Income Security Act (ERISA) Section 510 interference of benefits claims against Allstate Insurance Company.

Sixteen years-worth of litigation against the insurance company has been consolidated into one complaint. After Allstate terminated employment contracts of approximately 6,200 employee-agents and offered four alternative post-Allstate futures in 1999, 499 individual lawsuits have been filed.

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

While the court dismissed some ERISA claims brought by certain of the lawsuits after ERISA’s statute of limitations, it found that interference of benefits claims brought by later lawsuits could move forward due to equitable tolling. The first lawsuit, Romero v. Allstate, was filed within the statute of limitations, and plaintiffs who filed later lawsuits were covered in the class represented by Romero. The court concluded that the equitable tolling period preserves certain plaintiffs interference of benefits claims. However, plaintiffs in other cases did not file their lawsuits within the equitable tolling period.

The court also moved forward retaliation claims under the Age Discrimination in Employment Act (ADEA) and ERISA based on counterclaims Allstate made in responding to the Romero lawsuit. The court found that the counterclaims, and threat of litigation, could dissuade the employees from pursuing their rights.

The court’s opinion may be viewed here.

«