UK pension schemes have allocated more than £650m to commercial property in the last three months, highlighting the asset class’s growth in popularity.

The European hedge fund industry has continued to see a resurgence in returns, while there is cautious optimism for amendments to the much maligned EU directive.

UK pension funds have rejuvenated their interest in real estate, with more than 50% looking to up their allocation to the asset class in the next three years.

Proponents of hedge funds have argued the asset class’s strong returns in the first half of this year show it is still a valuable investment for pension funds.

Recent falls in property prices could undermine corporate guarantees made by sponsors to pension schemes, according to research by Trustee GAAPS.

Large pension funds were the biggest relative underperformers of all UK commercial property investors over 2008, according to the Investment Property Databank (IPD) Annual Index.

Litigation funding could prove to be a recession-proof asset class, according to US law firm Juridica.