DENMARK - The DKK371.5bn (€49.8bn) Danish labour market pension fund, ATP is looking into adding external suppliers of alpha, possibly via direct hedge fund investments.
The sophisticated fund has hitherto relied on its inhouse team for skill-based investing. It will now hire new staff to research potential external sources and suppliers.
"We will look at all the opportunities out there to acquire alpha, which is the broad spectrum from buying a traditional long-only mandate and hedging out their benchmark internally to buying directly into hedge funds," Fredrik Martinsson, chief investment officer for ATP's alpha strategies told IPE.
"I think it is probably one of the most fluid areas around given all the new products that are coming out," Martinsson said, pointing to synthetic hedge funds, clones and portable alpha concepts. He explained that the investment will not be a traditional fund of funds.
In the course of 2007 the fund will develop a business model and investment strategies to add external sources of alpha to the already existing internal alpha portfolio. According to Martinsson ATP expects the new strategies to earn DKK1bn (€135m) for the fund by 2009. ATP's existing internal alpha strategies are expected to create DKK2bn by 2009.
Martinsson confirmed that ATP will hire new people for the external alpha team with "the key task to understand all the products in the absolute return sector, mapping them and find out what areas in this huge opportunity field are best value".