GERMANY - BVV, an €18.6bn pension fund for the German financial industry, is believed to be looking to hire a consultant to advise on future investment in hedge funds.
BVV's chief executive Rainer Jakubowski has declined to comment or confirm the move, but market sources tell IPE the BVV is looking to hire a consultant to assist in its future hedge fund investment.
Jakubowski said in March the scheme would this year invest up to €200m in non-fixed income instruments, including private equity and hedge funds.
Should BVV now hire a for hedge fund investment consultant, it would mark a departure from the pension fund's previous thinking as the scheme decided against hiring a consultant when it began investing in the products in late 2004 - unlike other big German pension schemes.
In early 2006, Jakubowski complained the 2005 returns for the scheme's hedge funds were far below a target of between 6% and 9% but has since reported the products selected are meeting their return goals.
At last count, the BVV had €120m invested in five hedge funds - representing 0.6% of its total assets. In an interview with IPE over two years ago, Jakubowski said hedge funds could reach a maximum of 3-4% of asset allocation in the long term.
The BVV currently has well over 70% of assets in fixed income, and plans to integrate more structured products into this area to generate higher returns, while a further 11.8% is held in equities and 4.6% - including 0.8% directly-held - is in real estate.
Berlin-based BVV insures around 320,000 employees in Germany's financial industry and has just over 85,000 pensioners. Its return on assets for 2006 was 5.1%.