Belgium’s largest pension fund, the e3.5bn Belgacom scheme, has revealed its tender proposals for the investment of up to e300m of new asset inflows into hedge funds, real estate and credits.
William Van Impe, general manager of the Brussels-based scheme says the fund is starting an e50m tender procedure for hedge funds through a fund of funds approach.
“It is not an important amount, around e50m to start with – a little less than 1.5% of the portfolio.”
However, he notes that there are clear conditions, including risk factors, board satisfaction and the approval of the insurance control authority in Belgium, before the fund will actually proceed with any hedge fund mandate.
“We will have to understand what the risks are and how these risks are managed, both by the individual hedge fund manager and by the fund of funds manager also.”
He explains that under Belgian royal decree, the country’s insurance control authority has regulation, which while not hedge fund specific, concerns avoidance of leverage, transparency and safe keeping of assets, which have to be in Europe – all prime questions in hedge fund investment.
“They will decide the case on the basis of a complete file. We will go through the tender procedure, make a selection, and then go to them and say do you agree with this.”
Van Impe says the fund will go into real estate for 5% of its assets.
“It is marketable real estate – not direct, with a diversified portfolio in European real estate.
“It will be a tender procedure and there will be a new mandate.”
Van Impe says the fund will appoint “one or more managers”, for reasons of diversification.
“We have three global equity managers for diversification, so maybe it is not a bad idea to have more than one real estate manager,” he comments.
A similar tender has been put out for a corporate bond mandate and Van Impe says preparation of all the tender documents will be made for presentation to the board in August.
The final decisions, he notes, could be made by the start of next year, depending on the outcome of the tenders.
Concerning the shift from government to credit bonds, he comments. “We are going to do this in different steps, because we want a kind of time diversification.
“We are not able to forecast how spreads will evolve, so we will do it step by step and the first step will be that something like 6% of our bond portfolio will shift this year.”