NORWAY - The NOK3.4bn (US$0.68bn) Aker Pensjonskasse has been forced to halt its plans for further investment in alternatives following the introduction of the Norwegian pension law earlier this year, according to MandateWire.
Berit Morck, pension fund manager at Aker Pensjonskasse, said: "We have very strict regulations now from January 1st, which makes it very complicated with the alternative investments.
"We can only have 1% of our liabilities towards the pensioners in one investment, so one hedge fund and so on. We had to split the portfolio."
However, the scheme planned to keep its exposure to hedge funds and private equity in the future. "It's a good diversifier for us," Morck said.
"We are just going to stay at the same level, not going to reduce or increase. We think it's quite a limitation. It makes no sense really. One per cent for one fund is a very small amount. Maybe they could have increased the limit to 7%, but not have the limitation that we have to have seven different investments."
MandateWire also reported that the NOK3.5bn Det Norske Veritas Pensjonskasse was looking at investing more money into "other" alternatives in the future to complement its current 5% allocation to hedge funds.
However, the scheme is not planning any changes for this year, as a result of the pension fund regulations.
Corporate treasurer Tore Eilertsem said the scheme might consider the possibility of taking up more alternative investments in the future on top of the current hedge fund allocation.
He said: "It's a bit early to say, but we would certainly look into other alternatives as well."
Last year the scheme had expected the alternative investment limit to be increased substantially more than 2%.
"The regulations came out with only a minor increase for alternatives; 5% to 7% of the total. So far we have not done any changes in the allocation or the benchmark allocation, because the figures are so small that it's hardly worthwhile doing so, unfortunately," said Eilertsem.
"I think that most of the pension funds in Norway will tell you that this is a small disappointment that there was no larger increase in this quota."
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