Cliffwater recently found that better performing state pensions generally had higher allocations to alternatives, according to a recent article from Infovest21. The article states that the top performing state pension over the past 10 years had the highest allocation to alternatives. Incidentally, state pensions, as a whole, added 3% to their alternatives allocations in 2012.
Larger endowments outperform state pensions, possibly due to the higher allocation towards hedge funds and better access to managers—endowments allocate 34% of their alternative assets to hedge funds compared to state pensions, which allocate 17% of their alternatives.
Infovest21 notes that hedge fund allocations are the most rapidly growing alternative sector. For more information on hedge funds and state pensions, visit Infovest21 here.