Dutch schemes’ exodus from hedge funds continues

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The trend of Dutch pension funds abandoning hedge funds is continuing, according to IPE’s Dutch sister publication Pensioen Pro.

Citing statistical figures from supervisor De Nederlandsche Bank (DNB), it said the total amount Dutch schemes have allocated to hedge funds fell again last year to €23.6bn.

At the end of 2016 combined investment in hedge funds was €25.5bn, down from roughly €30bn the previous year.

Additional research by Pensioen Pro showed that, for example, the pension funds Randstad (€1.1bn), Avebe (€230m) and Van Lanschot (€989n) decided to divest their holdings in funds-of-hedge-funds last year.

The funds indicated that an important reason for the decision was that their investments had not produced the added value they expected.

They made clear that the returns of the relatively expensive asset class had been disappointing, and sometimes even yielded negative results.

In addition to the argument about costs and returns, the Avebe scheme said that its fiduciary manager, TKP Investments, had indicated that it was unlikely that hedge funds would generate better results for the short term.

SPH, the €10bn Dutch pension fund for doctors, also decided to cut its hedge fund allocation last year, citing costs and complexity. 

Despite shrinking overall allocations, Pensioen Pro said that it had found one pension fund that had increased its exposure to hedge funds last year.

The €3.6bn occupation scheme for physiotherapists (Fysiotherapeuten) said it had to shift assets to its hedge funds portfolio in order to stick to its strategic allocation of 4%, following an increase of its total assets.

In December, analysis by Pensioen Pro found that hedge funds had generated a return of 19.8% for Dutch pension schemes between the start of 2013 and the middle of 2017.

Access Pensioen Pro’s original article here (in Dutch).

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