BELGIUM - VKG, the e500m Belgian pension fund for doctors, dentists and pharmacists, is making a foray into hedge funds and is set to appoint one to two investment managers before the end of the year.
Financial controller Bert Vanbaelen told IPN the fund was considering a 3 – 5% allocation to the asset class but was yet to make a decision on the exact allocation.
“We have taken the decision to indeed invest in hedge funds but the actual underlying strategies have not been completely finalised yet,” he said.
Vanbaelen said VKG was in the process of preparing a short-list of managers and would be appointing “probably one, maximum two”.
“In principal we are looking for a manager who can manage several strategies and put it all into a fund of funds structure,” he said.
The brief would be in the range of e35m depending on the allocation and would be awarded by the end of the year, he added.
Vanbaelen said funding for the hedge fund allocation would most likely come from an evenly divided reduction of all other asset classes.
“It depends also a little on the strategies we are going to use,” he said.
“If for instance we would be allocating 5% to a strategy that would have a relation with our bond portfolio, I think it would be logical that we would actually change a little bit more on our bond portfolio than our equity portfolio.
“There are still a lot of questions open for us internally.
“We are working forward but I would expect the puzzle to fall in place all of a sudden.”
Pragma is advising the fund on its manager selection process.
VKG’s current asset allocation stands at 45% equity, 45% fixed income and 10% real estate.
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