The Netherlands' Central Bank has warned the country's pension funds that their €150 billion ($177 billion) investments in tech companies, representing almost 43 per cent of their listed equities portfolios and 8 per cent of their total balance sheet, is at risk from a potential AI bubble.
The UK’s £2 billion Church of England Pension Board, the pension fund for church clergy has changed strategy, slashing its equity portfolio in favour of private markets in a bid to seek stronger returns, income and a shelter from equity volatility.
Top-performing APK Pensionskasse is examining different regions and sectors, looking to increase its allocation to equity if markets decline in the second quarter. Chief executive Christian Boehm expects technological developments and geopolitical influences to affect markets, including in Europe’s financial sector.
The $42 billion Illinois Municipal Retirement Fund is using its enhanced internal management capabilities to start a quantitative portfolio applying multifactor strategies. The strategy is designed to build some downside protection into the fund’s equities allocation.
The $14.2 billion South Dakota retirement system is sitting on cash and T-bills to hedge against equity-type risk seeping into its portfolio. The fund remains opportunistic and won’t rule out fossil fuels.
It’s been said the “public market is quickly becoming a holding pen for massive sleepy corporations”. This has investors taking more late-stage stakes in private companies as perceived risks ebb.
The $53.8 billion AP7 is using shareholder resolutions to push companies to reveal their true positions on the Paris agreement and other measures. Corporations are taking notice and changing.
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