The last decade has seen significant changes in asset allocation, particularly for pension funds. There has been a strong trend to diversify and move away from traditional public equities and bonds into alternatives. The key driver has been the desire to create portfolios with better risk/return profi les by exploiting the potential of alternative strategies.
Alternative asset classes and strategies can serve a number of different roles in growth portfolios to improve the risk/return profi le. Some will be attractive as “return enhancers”, some will help with diversification, and others may add value through their sensitivity to factors such as inflation.
Source : Preqin