LONDON, 21 July 2026 – Aon plc (NYSE: AON), a leading global professional services firm, has said that UK defined benefit (DB) pension schemes and also foundations and endowments are continuing to increase their exposure to hedge funds, amid ongoing market volatility and wider macro-economic uncertainty.
Guy Saintfiet, partner and head of EMEA fund management for Aon, said:
“Against the backdrop of a changing economic and regulatory environment, UK pensions schemes’ investment needs are evolving. They want to keep their options open while also looking to preserve their strong funding positions. The improvements in pension schemes’ funding levels over the last couple of years and an increased focus on their endgame - including planning for a buyout or for running-on - has prompted many schemes to look at shorter-term investment horizons. This continues to make illiquid asset classes less attractive and instead we are seeing sustained interest in more agile hedge fund investment.
“The increased market volatility, especially since the start of the year, has further contributed to that momentum. Pension schemes and other institutional investors are looking for liquid diversification and steady absolute return as they navigate a macro-environment of heightened uncertainty and risk.”
Guy Saintfiet continued:
“Over the last 12 months, we’ve seen Aon’s own hedge fund solution gaining a significant increase in new mandates as well as assets under management rising by over a third. We designed the solution to meet broader client needs by delivering steady absolute returns, diversification versus equities and credit and downside protection. It has continued to sustain its strong performance through varying market conditions and has given schemes what they require as they look at the state of their own funding and what may be needed for the future.
“Hedge fund solutions continue to address key needs of institutional allocators from both the perspectives of the returns they offer and governance – the funds we have focused on combine strong investment results delivery with a focus on liquidity, cost and ESG integration. Funds that offer that combination continue to attract investment.”
Tim Banks, partner in the UK Investment practice for Aon, said:
“Hedge funds are clearly meeting the current objectives of DB schemes, but the asset class is also continuing to enjoy increased uptake from other investment clients such as endowments and foundations. Unlike many DB schemes, they do have a longer investment horizon but given the wider market volatility, they are choosing to use hedge funds in a tactical manner. This is providing them with a larger liquidity buffer while some illiquid investments are taking longer to return.”
ENDS
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