9/9/2010
By Kalpana Fitzpatrick
Nordic pension funds are set to increase their allocation to hedge funds over the course of the year as they look to further diversify their portfolios, according to a new Nordic hedge fund investor survey.
A report by European financial group SEB found that 41% of repondents (which included investors from Sweden, Denmark, Norway and Finland*) were expecting to increase their allocations to hedge funds during 2010; with most of them not having yet filled their maximum allocation quotas to the asset class.
The survey, which represented investors with assets totalling $630bn, also found that most Nordic investors invest in single managers as opposed to fund of hedge funds, most commonly via Capital Introduction teams, used by 76% of the investors.
When picking a hedge fund, most Nordic investors (52%) said a year’s track record was vital, although 31% said they did not require funds to have a minimum asset size before they invest.
In terms of where Nordic funds were investing, during 2009, 68% of all investments were made in non-Nordic hedge funds, with European and American hedge funds the largest targets to investors last year. Going forward, the European hedge fund space is again the largest investment target, followed by the US. In terms of strategy, Global Macro is expected to be the most popular strategy for 2010, with the Long/Short Equity also expected to perform favourably during the year.
Commeting on the findings, Charlotte Bonde Tamm, head of Capital Introduction at SEB, told European Pensions: "What we find encouraging is that over 40% of the respondents in the survey are planning to increase their allocations to hedge funds. It's also interesting to see that liquidity is an important factor when choosing managers, the strategies with generally higher liquidity terms like Global Macro, L/S Equity and CTAs are favoured. However the Nordic investors also accept lock-ups if the strategy so requires, which indicates that the level of knowledge is high among the investors."
* Swedish investors represented 73% of the Nordic investors in this survey, followed by Denmark (11%), Norway (11%) and Finland (5%).
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