Electrolux does not believe in equities, bonds
SWEDEN – An official at Electrolux, which has allocated up to 10% of its 1.5 billion-crown (164 million-euro) pension fund to hedge funds, says the household appliance maker “does not believe” in fixed income and equities.
“It is a matter of avoiding asset classes we do not believe in, such as fixed income and equities,” said the official, who is familiar with the matter but who declined to be named.
The officer also said the group, whose net sales fell from 135.8 million crowns in 2001 to 124 millions in 2003, did not necessarily see hedge funds investments as riskier than some equity investments.
Electrolux invested between five and 10% of its Swedish pension portfolio in individual hedge funds last summer and has just decided to invest a similar portion of the 800 million-dollar Electrolux US pension fund in funds of hedge funds.
The resources invested in hedge funds have partly been diverted from equities and fixed income portfolios.
The officer declined to name the managers in charge of the Swedish and US mandates.
Last year Swedish Electrolux recorded a minimum pension liability of 1.34 billion crowns (146 million euros) under US accounting rules, due to a 136 million-dollar deficit in its US pension funds caused by the decline in the stock markets.