The financial world is in deep turmoil, and the shocks are about to be transmitted to the real world in the unwelcome form of economic recession. Time will tell, but recent developments in the global banking industry, and the effects of those developments on stock markets and economies around the world, could undoubtedly affect institutional investor behaviour for years to come.

As investment returns take a turn for the worse, and risk and volatility increases across all asset classes, pension fund and insurance company assumptions and projections could be severely upset, deficits will increase, member security will be compromised and the cosy asset allocation models of the recent past may have to be rapidly revisited, if only to adjust portfolio weightings for the denominator effect caused by lower equity values. Pension fund beneficiaries, especially those who are invested in defined contribution pension funds and who are due to retire in