DENAMRK - Kommunernes Pensionsforsikring (KP), the pension insurance company of Danish municipalities, may foray into hedge funds this year.
The e9bn fund is considering a 5% allocation to the asset class and may tender for hedge fund managers later in 2004.
Neils Hougaard (pictured), head of investments said: “We will take a decision on this matter after summer. Any allocation to hedge funds will be made though our cash reserves.
“We have conducted an asset-liability study recently and have decided to to diversify after assessing the risk in our portfolio.”
Hougaard added that the fund may decide to appoint a consultant, once a decision to invest has been made.
KP has also appointed managers to a US-small cap equities portfolio and plans to increase its exposure in emerging markets from current levels of 2%.
The current asset allocation of the fund stands at 25% for equities, 66% fixed income and 9% real estate.
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