Chart of the Week: Pension fund allocation analysis

A study performed by PEI’s Research Analytics team has revealed that pension funds from across the globe have an average allocation 5.51 percent to private equity.

The analysis involved 676 pension schemes, of which 443 were public and 233 were private, from 35 countries with an AUM aggregate of $20.22 trillion – $656.48 billion of which is invested into private equity.

The data reveals that public pension funds on average allocate 5.8 percent to private equity, whereas corporate/ private schemes have an average allocation of 4.97 percent.

The public scheme with the largest allocation to private equity is The Latvian Pirmais Slegtais Pensiju Fonds – First Closed Pension Fund, with an allocation of 30 percent. However, a US corporate pension fund, Ashland Oil Inc, has the largest allocation of the sample – investing 35.17 percent of its portfolio to private equity.

In terms of dollar amount invested into private equity, public schemes within the sample account for 82.88 percent of the total. The California Public Employees' Retirement System’s $30.5 billion allocation is the largest public pension scheme of the sample. The General Motors US Pension Plan’s allocation of $6.33 billion is the largest corporate/ private pension scheme.