UK - The £2.7bn (€3.91bn) South Yorkshire Pensions Authority has made “an initial investment” in the Guernsey-domiciled fund of hedge funds vehicle launched by Hermes Pensions Management.
The authority is the first pension fund to invest in Hermes Absolute Return Ltd, which was launched in November for the £34bn BT Pension Scheme, which has allocated £540m to the asset class.
It is not clear how much South Yorkshire has invested, as fund manager John Hattersley was not available for comment.
Hermes said in a statement that it had built an in-house hedge fund team and had made strategic alliances in the hedge funds industry to manage the vehicle, which is meant to cater exclusively for pension funds.
Hattersley was quoted as saying that the new Hermes fund combines “extensive due diligence” with lower than industry charges.
“Additionally we are attracted by the opportunity to invest alongside the BT Pension Scheme, who, as owner of Hermes, ensures an alignment of interests between South Yorkshire and investment manager that is uncommon in the industry,” he added.
Hermes has appointed the Guernsey subsidiary of Royal Bank of Canada to provide fund administration services for the hedge fund of funds.
RBC will provide custody, corporate trustee, fund accounting, record keeping and banking services.