SWEDEN - The SEK3.7bn Vattenfall Pensionsstiftelse has decided to hold on to its cash assets with a view to stepping up its equity investments.
Earlier this year the Stockholm-based fund decided to examine the future investment of its 25% assets held in cash.
At the time, the fund for the hydro-electrical company was examining equity or equity-related derivatives for 15% to 20% of this portion and considering placing 5% to 10% in hedge funds, fund of funds or private equity.
In April Vattenfall hired an undisclosed Swedish hedge fund manager to run about SKr 200m on a long/short equity basis.
However, it is understood that the remaining cash may be used to enhance existing equity portfolios, pending market conditions, although the fund is not considering new managers “at the moment”, said a source.
The rest of the asset allocation is around 60% fixed income; 10% equities; 5% hedge funds.
The statistical benchmark allocation stands at 55% in fixed-income (40% inflation index-linked bonds; 15% Swedish mortgage index); 45% over equity indices.
State Street Global Advisors oversees its international investments and Handelsbanken manages domestic holdings.
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