CANADA - A Canadian pension plan has invested $104m in the new version of Acadian Asset Management's managed volatility strategy that mixes developed and emerging equities, the firm said.
Acadian was not able to name the client, but said the mandate marked its first managed volatility mandate win in Canada, and the first time the firm has taken the approach of combining the two types of equities. The strategy will be benchmarked against the All Country World Index.
Churchill Franklin, Acadian's COO said: "This mandate underscores the rising popularity of managed volatility approaches with our clients globally. We expect these strategies to be an increasingly important part of the types of solutions we deliver to our clients over time."
Mr. Franklin added: "In particular, we are seeing strong interest from clients who are adopting liability driven investment (LDI) solutions since managed volatility strategies offer the potential for equity market returns with substantially less volatility and strong downside protection - characteristics that appeal to sponsors looking to reduce overall plan-level volatility or better match that volatility with their liabilities."The firm has so far raised $1.5bn in its managed volatility strategy, and has seen some success among European investors.
Last week, Acadian announced it had hired two new staffers for its London office. Sander van Ouwerkerk was brought in to grow its Benelux region and Naureen Khan as part of the marketing and consultant relations team. (Global Pensions; 23 May 2011)
Laurent de Greef, managing director and head of the London office told GP he expects most growth in the strategy to come from European investors. He said interest has mainly come from defined benefit funds looking to de-risk or re-position risk within their portfolios.
Going forward, the firm is looking at how to develop the strategy for target date funds in defined contribution plans.
"As you get close to the retirement age, volatility is scary to have... Our feeling is this type of strategy is ideal for target date," he said.
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