“Pension funds continue to search for new investment opportunities, and alternative assets have been an area where they have made, and continue to make, very significant allocations,” said Brad Morrow, head of Towers’ manager research for the Americas.

Alternative assets now account for 18 percent of all global pension assets, up from 5 percent 15 years ago, says Morrow.

The 100 biggest pension funds hold about $1.36 trillion in alternative investments. Real estate funds account for the biggest chunk of that – $478.4 billion.

Morrow says pension funds are also at the forefront of investing in newer alternatives, such as real assets and illiquid credit.

They definitely are continuing to place their faith in private equity. Private equity in the 100 biggest pension funds accounted for almost $200 billion in this year’s survey, and private equity funds of funds, considered to be its own asset class by the survey, accounted for nearly $265 billion.

With pension funds, and even more so with other classes of institutional investors, “alternative” investments may no longer be appropriately named, according to Morrow.

“Most of the traditional alternative asset classes are no longer really viewed as alternatives, but just as different ways of accessing long-term investment themes and risk premiums,” explains Morrow.

“As such, allocations to alternatives will almost certainly continue to increase in the long term.”

The top 25 alternative asset managers of wealth management have about $426 billion under management, similar to the amount in 2012, but still more than insurance companies, whose allocations to alternative assets are up 13 percent this year to $275 billion.

Managers of bank assets decreased their allocation to alternatives by 23 percent, reducing the holdings of the top 25 managers in that class to $124 billion.