Interest in shipping as an asset class is growing among UK pension schemes, say some investment experts, as schemes look to diversify into real assets and niche investments.
Schemes have been increasingly moving into alternatives for its income and growth potential, with property and infrastructure proving popular.
In 2014, for example, there were 56 instances of UK schemes investing or reweighting existing investments into property, totalling close to £4bn, according to Financial Times service MandateWire.
Alex Koriath, head of UK pensions at consultancy Cambridge Associates, said growing interest in shipping was likely due to an increased desire for uncorrelated assets with illiquidity premia.
He added, however, that such assets may not be right for everyone.
“For our clients, what’s interesting is they have an aim to have a diversified portfolio of niche assets with low correlation,” he said. “What goes in there is not very prescribed. I think you need a bit of flexibility.
“We would see [shipping] as a possible part of a private investment portfolio or niche portfolio, but we wouldn’t see it as a standalone investment.”
Andrian Dacy, managing director of JPMorgan Asset Management’s real assets team, said shipping’s popularity had been growing since the global financial crisis in 2008.
“Following the crisis, asset valuations were at historical lows and distressed debt provided an opportunistic entry point for investors.”
He added that growth in seaborne trade averaged 6.5 per cent annually since 2001 against a 4 per cent average global GDP growth.
