UK - Hermes Pensions Management - the in-house fund management arm of the BT Pension Scheme - is in talks with 12 schemes about investing in its hedge funds.
Hermes is setting up a team to handle the BTPS’s first investments in the asset class in April. The BTPS is committing £500m to 40 single strategy hedge funds in a bid to lower portfolio risk and boost returns.
Hedge fund consultant Albourne Partners is assisting Hermes in selecting managers for its products which, it says, differs from others in the market as they are designed specifically to meet schemes’ needs. The funds will be up and running in the autumn.
Hermes deputy chief executive Charlie Metcalfe (pictured) said that the firm was currently holding discussions with 12 other schemes – including local authorities – about investing in its funds, but stressed that no agreements had been signed.
Metcalfe said: “If done properly, hedge funds reduce risk and volatility. But the frustration with hedge funds is that they lack alignment with what schemes want. It is very important that it has to be a good fit – if somebody wants something different, we’ll politely decline their business.”
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers