UK - Railpen Investments, the in-house investment manager for the £15bn (€17.7bn) industry-wide pension fund for British railway workers, has invested £65m in a fund of long-short equity hedge fund with Goodhart Partners.
Goodhart is a London-based firm created through the management buyout of WestLB Asset Management's multi-manager team, and is allied with Northern Lights Ventures of Tacoma in the US.
Railpen Investments oversees pooled arrangements in which member schemes can invest, but it takes a slightly different approach to some pension funds in its placement of these alternatives within the asset allocation strategy.
The fund has has approximately £1bn (€1.17bn) in a cash plus pooled dund, which is basically hedge funds money. However, officials do not consider hedge funds to be an asset class in their own right so investments can be found in among its other pooled funds, most notably the much larger Global Equity Pooled Fund which has around £8bn in assets under management. The Goodhart investment sits within Railpen's global equity holdings.
Railpen will be the major investor in the Global Long-Short Equity fund, which aims to outperform cash by 5% per annum in any environment.
The Luxembourg-based SICAV is managed by Alan Bartlett and Paul Lavin and its total capacity is US$750m (€521.9m). Following investments by Railpen and other prospects, that capacity is expected to fall to US$550m.
Goodhart's speciality is to invest in under-researched managers, typically with track records at larger organisations but now establishing their own operations. And it rarely invests in managers which have already accrued considerable assets under management.
Railpen already invests in long-short equity strategies but Paul Jeffries, in-house investment analyst, said that Goodhart's style gave it access to niche and emerging managers, often with limited capacity, which would be swamped if approached by larger funds of hedge funds.
Donny Hay, partner at Goodhart, said the underlying funds disclose all stockholdings, enabling Goodhart to see and monitor exactly what its clients are investing in.
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