The biggest global funds should all be monitoring their investments in illiquid assets, according to the head of Canada’s largest pension fund.

“I do ring the alarm bell on not to be too invested in illiquid assets,” Mark Machin, chief executive officer of the Canada Pension Plan Investment Board, said in a Bloomberg Television interview Monday at the World Economic Forum in Davos. “We are very comfortable with our risk models and what we would do in various lurches down markets, but I do worry about the expansion of a lot of funds like us around the world into private illiquid assets.”

Lower-for-longer interest rates have pushed pension funds and asset managers to cast their nets far and wide in search for returns amid a slew of geopolitical risks and trade tensions. Investors looking to diversify their portfolios are seeking shelter in low volatility assets that tend to be illiquid like infrastructure investments.

But the rapid dash to alternative assets by the stewards of retirement cash comes with risks, and it’s caught the attention of regulators. One major worry is that a downturn in funds would struggle to pull cash out of illiquid assets. While pension funds typically hold debt until maturity it doesn’t mean they can’t be hurt by mark-to-market losses.

Read more @Bloomberg