Institutional Investor: Soaring Markets Aren’t the Only Reason Pensions Grew in 2020

Despite a challenging year, the largest pension funds grew in 2020 compared to the prior year. What caused such  growth despite the hurdles of COVID-19? Researchers argued it was the increased focus on improving governance models to achieve goals like sustainability, diversity, and net-zero mandates.

In a recent "Institutional Investor" article, Tom Harvey, Director of the Advisory Team, reports that the growth isn’t specific to 2020. It is a story that has been building for the past ten years. “Most of this return is just a function of the markets,” he explains. When asked whether governance of pension funds played a role in the growth, he says, “Even if there was a differentiator, it’d be hard to tell in a year.”

Pension plans’ growth is largely dependent on their long-termism. Because they plan far in the future, viewing their liabilities as 20 to 30 years out, they stay invested through thick and thin.

Read the full article.

Information provided by SEI Investments Management Corporation, a registered investment adviser and wholly owned subsidiary of SEI Investments Company (SEI). Neither SEI nor its subsidiaries is affiliated with any firms mentioned herein.

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