Health scheme reduces exposure

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The €1bn Amonis pension scheme for dentists, doctors and pharmacists has reduced its exposure to real estate and equities and ploughed roughly €34.2m into a fund of hedge funds portfolio managed by Key Asset Management.

This is the first time the scheme has invested in hedge funds, regarded as a diversification tool by Amonis chief financial officer Tom Mergaerts.

The mandate was awarded to Key, a European hedge fund outfit with just over €1bn in assets under management, following a competitive tendering and selection process.

The process, which ran from spring 2004 until spring 2006, involved a long list of more than 60 hedge fund managers and 20 tenders.

Key's London-based chief executive Peter Dencik said: "My understanding is that this is one of the very first investments in hedge funds by a
Belgian pension fund." He added that this trend is likely to continue.

"What you see is pension funds in continental Europe in general… moving now into strategic asset allocation to include hedge funds in that asset allocation approach.

"It's diversification and a higher degree of confidence or understanding, if you like, with what hedge funds do for you in the portfolio."

Margaerts said it is "impossible to say at this time" whether the scheme would increase its investment in hedge funds in the near future.

The Amonis scheme has 42% of its portfolio invested in equities, 42% allocated to bonds, 9% invested in real estate and 7% in alternatives. The fund has 14,000 members.

Brussels-based Pragma Consulting under managing director Koen De Ryck was consultant in the tendering and selection process.

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