US – The City of New Haven’s Employee Retirement Fund (NHERF) has invested US$8m in a hedge fund replication strategy based on exchange traded funds (ETFs) marking the scheme’s first foray into hedge funds.
The investment will be through a managed account vehicle provided by IndexIQ, which will invest in a range of ETFs.
Ameriprise Financial Services - which advised NHERF in this deal - consultant Derek Ciampini said: "In today's economic environment, it is especially important for trustees to be open to examining alternatives as part of their investment allocation to ensure it has the proper diversification to meet the evolving needs of their fund."
IndexIQ executive vice president Anthony Davidow said: "The City of New Haven was contemplating adding hedge fund exposure to its Retirement Fund, but was leery about the recent difficulties of other public funds. The Trustees were attracted to the investment merits of hedge funds, but were concerned about liquidity and transparency."
Hedge funds replication products have been used by pension funds in the past to get a first exposure to the asset class, while at the same time maintaining a higher level of liquidity and transparency.
Last year a growing move by pension funds towards hedge fund replication prompted a warning they could be missing out on the returns offered by direct allocations to the asset class (Global Pensions, September 1, 2008).
According to the latest Credit Suisse/Tremont Hedge Fund Index hedge funds performance were up 2.11% in November and 17.53% year to date.
Get the latest news direct to your inbox.
More from US
Updating your subscription status
This paper is for those who are interested in keeping up to date with the latest pensions changes in more depth. Suitable for trustees, pensions specialists and in-house company pensions teams. It's an interactive document which means you can quickly jump to the information that interests you.
This survey looks at the experiences of 97 completed member option exercises, covering over 180,000 members. We also had input from four of the leading Independent Financial Adviser (IFA) firms who have shared their insight on the member experience based on the direct contact they have with members.
Up to £35,000 p.a. depending on experience + benefits
Torfaen County Borough Council
GBP35000 - 35000 per annum
Send to a friend