WEST PALM BEACH, FL (HEDGECO.NET) – ABP pension funds have decided to invest in alternative investments according to published news. ABP plans to put about 20% of its investment money into suchstrategies, including fixed-income, real estate, private equity, commodities, and absolute return strategies such as hedge funds.
ABP pension fund is a civil service pension scheme, according to a statement attributed to ABP authorities. �An investment mix in which ABP avoids short-term risk is not an option, given the very poor long-term results of such strategies, ABP considers this an ill-advised choice. A sound financial policy requires a yield of 6 to 7 percent, which cannot be achieved without a substantial percentage of equities and alternative investments in the mix.�
There are significant numbers of European pension funds opting for hedge funds, in the UK. Currently about 20 of these schemes are invested in hedge funds, and another 30 schemes are interested in hedge fund products, according to published reports. Among the largest of the UK schemes already invested in hedge funds are J Sainsbury, Railways, Stagecoach, and Flintshire County Council Pension funds.
ABP said alternative investments are a vital part of its investment strategies, because such portfolios provide diversification. ABP Pension funds have been investing in hedge funds since 2002. The firm invests in both hedge funds and fund of hedge funds. Currently ABP�s strategic investment portfolio is made up of 44% fixed income, 36% equities and 20% in alternatives strategies. ABP manages about 150 billion (Euro) in pension assets.
As hedge funds continue to offer absolute return strategies to investors, it is quite likely that the number of European pension plans investing in hedge funds will continue to rise over the years, in light of the fact that more European countries are opening up their markets to retail and institutional hedge fund markets.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
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