A survey has shown that Irish pension funds assets grew by 12.6% in 2006, compared to an increase of 25% in 2005 ,though the value of assets has almost doubled in the last four years.
A total of €87.7 billion was invested in Irish funds at the end of December 2006, according to the annual Irish Association of Pension Funds (IAPF) asset allocation survey.
Equities continue to dominate, accounting for 63.4% of assets under management. However, this was a 1.6 points drop from the 65% in 2005.
The IAPF said this small drop may camouflage a more significant strategic move away from equities.
The study finds that at the end of last year, €9.7 billion was invested in Irish listed stocks, representing 8% of the total equity market.
IAPF Chairman, Joe Byrne, said that recent turbulence on the stock markets needs to be taken in context with the long term nature of pension fund investment.
'Over the ten years to the end of February 2007, the average managed fund return was 9% per annum, and that included three consecutive years when equity markets declined', he said.
The report shows that the property content of Irish pension funds increased from 8% to 9% in the year.
It finds that since the end of 2002 the value of assets managed by Irish pension funds has almost doubled from €44.8 bn in 2002 to €87.7 billion at the end of 2006.
For the first time the study shows a breakdown which shows that 82% of assets are managed on behalf of defined benefit schemes, 14% on behalf of defined contribution schemes, and 4% are invested under additional voluntary contribution arrangements.
The report suggests a trend towards investment in alternative assets such as forestry, private equity and direct currency holdings.
The total invested in alternative assets in the year tripled from 0.8% to 2.4%.
In 2005 Irish pension funds assets grew by 25% to €77.9 billion.
