• Investment in alternative assets provides three key benefits for pension funds: broader diversification, the potential for increasing returns, and the ability to reduce portfolio risk and volatility.
• Investing in alternative assets also presents a series of challenges: complexity, high commissions, presence of a ‘J’ curve (losses at the beginning of the investment, subsequent gains), valuation difficulties and choice of the best alternative asset managers to ensure a good return on investment.
• Latin American pension funds have gradually increased their investment in alternative assets, but it is still significantly lower than the investment of the pension funds of developed countries. This is mainly due to regulatory issues.
• It is important for authorities and fund managers to ensure adequate conditions for advancing in the process of investing in these types of assets. It is particularly necessary for fund managers and Superintendencies to strengthen corporate governance and the risk identification, management and control processes involving alternative assets.

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