Canadian corporate pension funds reported an average funding ratio of 117 per cent, while public pension funds reported an average of 116 per cent, according to a new report by Coalition Greenwich.
The study, based on interviews more than 150 of the largest tax-exempt funds in Canada, found in 2023, these investors reported that, on average, six per cent of their portfolios were allocated to private debt assets, an increase from four per cent in 2022, while private equity stayed flat at 10 per cent year-over-year. The only other category that increased was global equities, which rose from 23 per cent in 2022 to 24 per cent in 2023.
Allocations to hedge funds decreased to one per cent in 2023, compared to three per cent in 2022, as did allocations to real estate, which declined from 15 per cent to 14 per cent year-over-year.
In a press release, Todd Glickson, head of investment management North America at Coalition Greenwich, said research shows fully funded pension funds are taking steps to shore up their plans and reduce future funding risk. “Allocations last year also increased one percentage point to 10 per cent for infrastructure, another alternative asset class with the potential to diversify portfolios, protect against inflation, mitigate volatility and, hopefully, enhance returns.”
Read: Institutional investors increasing allocations to private assets over next 3 years: survey