Although there is an obvious rise in the popularity of alternative assets, the figures from the survey also revealed that there is not much diversification within the plans’ alternative allocations. It would seem that at the moment, Canadian pension funds limit themselves mainly to real estate and infrastructure. Without much surprise, many investment analysts feel that this is a mistake. Challengers say that pension plans would benefit from venturing into hedge funds, private equity and hard assets. The fact of the matter is that Canadian plans still do not have sufficient knowledge of alternative investments or how to introduce them.
“Alternatives can be complex, so it’s pretty hard to convince people that they need to advance on that front ... A pension fund doesn't want to be the first one investing in a certain alternative so plans look around to see if others are doing it."- Mercer's Investment Management Business Leader for Canada and Latin America