FINLAND - Kuntien Elakevakuutus, the e13bn Helsinki-based local government pension fund, plans to search for a hedge fund manager during the year.
Kimmo Lehto, associate director said:”We have not decided if the new investment will be in the form of single manager or multi manager. However, we plan to allocate around $100m (e81m) to the new manager.”
The fund is on the verge of hiring a second hedge fund-of-funds manager and Lehto said that the terms and conditions were currently being worked out. The Chicago-based Mesirow Financial was the first hedge fund manager hired to run a $100m fund of fund mandate.
Lehto added: “We have a long-term allocation of around 4-6% towards alternatives and we are currently behind these targets.
“Alternatives are a source of diversification and increasingly most pension funds are looking to diversify into newer asset classes.”
The fund has also appointed First State Investments and Aberdeen Asset Management to run a e400m Asia-Pacific (ex-Japan) equities mandate.
Lehto said that the fund was also looking to allocate towards private equity and had appointed Grove Street Advisors, a US venture capital fund of funds manager to a $125m brief.
Current asset allocation stands at about 40% equities, 9% real estate, 3% alternative investments and the remaining 48% in fixed-income investments. Fixed-income includes bonds, loans and money-market investments.
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