UK - Dorset County Council pension fund has invited applications for a manager to run an active currency mandate. The fund has allocated £35m, representing 2% of the portfolio, for the allocation.
A spokesperson for the £1.4bn fund explained it has used a 50% passive hedge for the last two years.
“An active allocation was the next step on from the passive hedge, it was topical in every committee meeting, it was discussed and decided the fund could add alpha though currency overlay,” said the spokesperson.
Subsequently, the pension scheme is hoping to achieve returns of 0.5% with the new strategy, which is its first allocation of this type.
The assets for the allocation have come from cash that had been waiting to be drawn down into private equity investment.
Applications for the mandate should be submitted by 21 September 2007.
The announcement comes just days after the pension fund appointed European Credit Management with a £140m fixed income contract and Royal London Asset Management with a £140m fixed income contract.
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