Seventy eight percent of professional investors believe that the majority of pension funds will not reach their long-term investment targets given increased longevity, according to a survey conducted by GAM, the independent active investment manager.

Regulation is seen as a key barrier to generating sufficient returns and satisfying liabilities, with 64% of respondents agreeing that regulation needs to change to allow retirement schemes more flexibility in their asset allocation decisions.

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Half of respondents anticipate that they will increase their allocation to active products over the next three years, with only 13% planning to increase their investment in passive products.

Thirty eight percent plan to increase portfolio allocations to alternative investments during the second half of 2015, 35% to European equities and 27% to emerging market equities.

Geopolitical risk, failure in the economic recovery and interest rate movements are perceived as the main risks for investors.

However, only 34% of respondents expect a Greek exit from the Eurozone in the next 12 months, and even fewer, just 9%, believe that Great Britain will exit the EU under the new government.

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Group CEO Alexander Friedman said: "It is clear that politics and possible policy errors remain a key near-term risk for markets, however economic fundamentals should support the on-going recovery. The investment backdrop has changed dramatically in recent years as monetary policy has begun to diverge and we believe that the markets have reached an inflection point; the indiscriminate market rally in risk assets is coming to an end and investors have to take a truly active approach to identify the sources of alpha for the coming years.

"Investors are rightfully concerned about how retirement liabilities will be met and believe that a flexible investment approach is required to remedy this. The key challenge for fund managers is to offer clients strategies which are differentiated and add meaningful value. Passive investments cannot be relied upon in the current market conditions – investors want to see high conviction from the managers they allocate to and at GAM we believe this is essential for delivering attractive returns."

The survey was completed by 78 institutional and wholesale investors from across the globe attending the GAM Partner Seminar in Rueschlikon, Switzerland, an event for institutional clients.