Ipac will dramatically increase its alternative asset allocation, with chief investment officer Jeff Rogers flagging levels as high as 20 per cent across the firm’s $17 billion under advice and management.

According to Rogers, the double digit equity returns of the past few years cannot be expected to continue. He said that in 2008, “strategies that are independent of market direction will become more important in portfolios, as will new asset classes and investment strategies that have until now not been included in traditional balanced funds”. ipac’s current alternatives exposure of 3 to 5 per cent does not impact the portfolio in any meaningful way, Rogers said, and he would like to see the allocation increase to as high as 20 per cent in aggregate. Ipac is currently looking to appoint alpha-generating managers such as funds of hedge funds and tactical asset allocation managers, and to gain exposure to alternative market drivers, such as infrastructure and commodities. van Eyk recently launched a new strategic asset allocation strategy, reducing its holdings in equities, listed property trusts and fixed interest. van Eyk predicts a period of rising inflation and volatile global markets over the medium term, and is skewing its portfolios toward alpha strategies, inflation hedges like gold, and growth areas. Nigel Wilkin-Smith, van Eyk head of strategic research said that “strategies investors have been using over the past 20 years will no longer provide the same rewards and there needs to be a change in approach”. While recent market turmoil had restored some value to equities, Wilkin-Smith said van Eyk would wait for the “;dust to settle”; before increasing its exposure.

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