UK - The 900 million-pound (1.3 billion-euro) Dorset County Pension Fund has allocated five percent of its portfolio to hedge funds investments as part of a review of investment strategy.
The authority has split its 45 million-pound funds of hedge funds budget, diverted from the UK equities portfolio, into two mandates of the same value, said investment officer Nick Buckland.
Buckland confirmed that Pioneer Alternative Investments was one of the two appointees, chosen among 60 candidates with the help of bfinance. He declined to name the second manager.
No fund manager has been fired as a result of the change in the council’s asset allocation, he explained.
The 22.5 million-pound mandate managed by PAI will be invested in the Momentum AllWeather Sterling Fund.
Nigel Meir, Pioneer’s head of sales and distribution for the UK, said: “UK institutions and the consultants that guide them are among the most demanding investors in the world and we had very strong competition.”
“I believe that more institutions will allocate to funds of hedge funds in particular and this endorsement can only serve to give confidence to prospective investors,” he continued.
Meir also said: “AllWeather has the type of track record that can complement both the risk control and liability models of defined benefit pension schemes.”
He said that almost 50% of UK pension schemes have invested or are considering investing in hedge fund vehicles, said the asset management firm.
Dorset has evened its UK and overseas equity portfolios to 30% each, instead of the previous 40%-20%. The new bond portfolio amounts to 20% - and consists of mainly UK bonds, 10% has been allocated to property investments and five to cash, Buckland said.
According to the International Pension Funds and their Advisors 2004, the plan employs Pictet Asset management and Prudential M&G as asset managers.