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Council pension fund to boost hedge fund investment

Date: Friday, May 1, 2009
Author: London Stock Exchange

The 1.05 billion Berkshire county council pension fund plans to allocate 7.5 per cent of its assets to hedge funds as part of a "decisive move" towards upping its exposure to alternative investments, according to reports.

Reuters reports that the move places the scheme at the "highest end of exposure" to hedge funds among the historically conservative pension fund sector.

Berkshire's overall investment strategy will see it allocate 17.5 per cent of assets to alternative investments while halving its exposure to listed equities as it looks to diversify its portfolio and stabilise returns.

The move follows the decision by the 6.5 billion West Midlands Pension Scheme to allocate eight per cent of its assets to absolute return strategies including hedge funds and the announcement that the 23 billion Universities Superannuation Scheme plans to double its exposure to alternatives to 20 per cent.

Hedge funds suffered the worst year on record in 2008, losing an average of 19 per cent.

However, figures from Eurekahedge show returns of 0.93 per cent during the first quarter of 2009. Over the same period, the MSCI World Index was down 12.5 per cent.