UK - HSBC Asset Management is to offer scheme members access to hedge funds as part of the defined contribution service it is set to launch.
HSBC will launch its contract-based DC platform on October 4 and its trust-based proposition shortly afterwards. The DC service will offer broad investment options, including core active funds, passive and manager-of-managers.
It will also offer a suite of specialist funds, including HSBCís Amanah fund, which is compliant with Islamic law, as well as its property and global socially responsible investment funds. And HSBC institutional business director Julian Lyne said the firm is set to add funds of hedge funds by the end of the year.
The funds will be provided by its sister company, HSBC Republic Investments, and Lyne said that when the firm was ready to add them to its DC platform, all the necessary hedge fund education materials would be in place to support clients.
He said: “We see ourselves as a responsible provider. We need to make sure people know the implications and the risks. We’ll be happy to do that and make sure that all the communications fit in with all the other material we produce.”
Watson Wyatt partner Andy Hunt welcomed the move.
He said: “We are very supportive of attempts to get the more interesting - i.e. good - investment ideas into DC. A lot of the interesting stuff that has occurred in investment over the past years has been missing in DC. This is a laudable effort.”
But Hewitt Bacon & Woodrow associate Brian St John-Hall said he had “serious concerns” about offering hedge funds to DC members. And he predicted that schemes would find it difficult to communicate the investment risks attached to hedge funds to members.
Mark Evans has been appointed as a director at Independent Trustee Services (ITS) to lead trustee appointments in London.
The Pension Protection Fund (PPF) is consulting on changes to the actuarial assumptions it uses in valuations in a bid to better reflect the bulk annuity market, with schemes set to move into surplus on aggregate.
Private sector defined benefit (DB) schemes were 96.3% funded on a Pension Protection Fund (PPF) compensation basis at the end of July, according to the lifeboat fund's monthly index.
Conduent has completed the sale of its actuarial and human resource consulting business to private equity investor, H.I.G. Capital.