AUSTRIA - The Victoria-Volksbanken Pensionskasse (VVP) may hedge parts of its portfolio in 2010, its new head Axel Hartleib, has told IPE.
He will take over as chairman of the board from January at the €450m Pensionskasse which won this year's IPE country award for Austria.
Hartleib, who was one of the founding fathers of the Pensionskasse in the 1990s, will take over from Ferdinand Kernbauer, who is retiring.
"We are cautious about economic developments in the first quarter 2010 as we do not see the basis for a positive growth in the real economy," explained Hartleib explained.
Outgoing chairman Kernbauer confirmed that the Pensionskasse is currently looking into how much equity risk hedging would cost for higher risk portfolios, and whether such an investment would make sense.
The equity hedge - managed through put options - would be applied to approximately half of the total portfolio as such a measure is not necessary for those members who have chosen conservative investment strategies holding only 10% in equities.
"We are generally working with stop/loss-barriers in our equity investments but we are now also looking into using puts," Hartleib added.
Since the beginning of this year, the VVP has returned around 8% on investments but board members pointed out there was a wide range of returns, of between 4.5% and 9%, depending on the risks taken in the various portfolios.
The VVP, which is part of the ERGO Austria insurance group, was awarded the Austria country award - its third IPE award - for its anti-cyclical investment strategy as well as its focus on risk management.
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