The UK's pension protection fund (PPF) is looking to include hedge fund mandates to help make up a d...
The UK's pension protection fund (PPF) is looking to include hedge fund mandates to help make up a diversified portfolio.
The PPF, designed to take on the scheme liabilities of UK companies that become insolvent, intends to adopt a contrarian approach to investing.
Partha Dasgupta, the PPF's director of investment and finance, said this could by definition mean a moderate allocation to hedge funds.
The PPF was established in 2004 to manage liabilities and assets of pension funds of defunct firms, taking in its own assets via levies on healthy pension schemes, and by receiving assets of funds from insolvent firms, and recovering assets from defunct companies.
Dasgupta, speaking at International Investment's sister title Hedge Funds Reviews's European Hedge Fund Investment Forum, said UK finance directors were increasingly nervous that pension schemes had around 60% in such a volatile asset class as long-only equities.
He added: "Looking at the information ratios of hedge funds as an asset class, there are potentially diversification benefits and reduction of volatility benefits in pension funds investing in hedge funds."
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