mast image

Special Report

Impact investing

Sections

Swiss fund to select hedging or overlay manager

SWITZERLAND – The SFr 4.6bn (€3.1bn) Bernische Lehrerversicherungskasse (BLVK), pension and insurance fund for teachers employed by the Swiss canton of Berne, is considering modifying its asset allocation strategy to include either currency risk hedging or currency overlay components in order to control and reduce risk.

A spokesman for BLVK says no decision has been taken and denies that the move represents a change in investment strategy. “We are still very much in the discussion stage. We will probably adopt one of the two new proposed investment classes, but not both. We could go either way,” he explains.

BLVK says it cannot adopt both new strategies because of its distinct management requirements. “If we decide to start hedging currency risk, then the passive management style of hedging currencies means that we would be able to run it in house, whereas currency overlay policies imply active management, so we would need to bring in external managers. We are not in a position to do both,” says the spokesman.

The changes are being proposed by the fund’s new investment committee, which is keen to introduce greater risk control, since it believes the declines in the equity markets are causing increasing volatility. “Market turbulence over the past couple of years is beginning to take its toll and is forcing us to take a long, hard look at our investment policy. We believe it is time to take protective measures to reduce and control risk,’ says BLVK’s spokesman.


Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2548

    Asset class: Fixed Income, Emerging Market Debt Hard Currency (Active).
    Asset region: Emerging Markets.
    Size: CHF 300-400m.
    Closing date: 2019-07-30.

  • QN-2549

    Asset class: Fixed Income, Emerging Market Debt Hard Currency (Passive or Passive Enhanced).
    Asset region: Emerging Markets.
    Size: CHF 300-700m.
    Closing date: 2019-07-30.

  • QN-2550

    Asset class: Fixed Income, Emerging Market Debt Local Currency (Active).
    Asset region: Emerging Markets.
    Size: CHF 250-350m.
    Closing date: 2019-07-31.

  • QN-2551

    Asset class: Fixed Income, Emerging Market Debt Local Currency (Passive or Passive Enhanced).
    Asset region: Emerging Markets.
    Size: CHF 250-350m.
    Closing date: 2019-07-31.

  • QN-2552

    Asset class: Fixed Income, High Yield (Active).
    Asset region: High Yield (US).
    Size: CHF 500-600m.
    Closing date: 2019-07-29.

  • QN-2553

    Asset class: Fixed Income, High Yield (Passive or Passive Enhanced).
    Asset region: High Yield (US).
    Size: CHF 500-1'100m.
    Closing date: 2019-07-29.

  • QN-2554

    Asset class: Global Real Estate (Equity, unlisted Funds).
    Asset region: World (ex-Switzerland).
    Size: CHF 200 mn (potential for further growth).
    Closing date: 2019-08-07.

  • QN-2556

    Asset class: FX Hedging.
    Asset region: Global.
    Size: Mandate size of CHF 1.5 bn.
    Closing date: 2019-08-09.

  • QN-2557

    Asset class: All/large Cap Equities.
    Asset region: China A-shares.
    Size: Unit linked platform (0m USD in initial investment).
    Closing date: 2019-08-01.

Begin Your Search Here
<