AUSTRIA - Officials at the Austrian multi-employer pension fund APK say the crisis has led them to move its assets further away from long-only benchmark investment, although the old investment categories will still continue to exist.
"Even in our long-only portfolio we will be taking a much more active approach," said Christian Böhm, head of the APK. "However, this long-only part of investments will get smaller."
He explained the fund was looking into strategies which were a good match to balance out traditional equity investments but added the APK would "surely not start investing in hedge fund benchmarks" in bulk.
"The classical approach of setting a bond and an equity quota which you then see through rigidly is no longer valid," Böhm explained.
"But the classical investment categories will continue to exist and, for example, even in a market environment like 2010 we will not fully exit government bonds."
According to Böhm, funds do have to have the courage to invest in market segments such as distressed debt because there are still some opportunities in sectors where the drop in price was unrelated to fundamental data.
He also confirmed the "number of external managers hired by the fund will increase" as more specialists for certain investments are hired.
Böhm is careful, however, when giving out figures about APK's alternative asset investments as he pointed out "a comprehensive approach" had to be taken on these investments in line with the rest of the portfolio.
"Commodities, for example, are very volatile in difficult times, are not completely uncorrelated and a globally-diversified equity portfolio typically already has a large commodity exposure via countries such Australia or through emerging markets investments," he argued.
Similarly, he believes real estate is a good diversifier to mix into a portfolio but he is cautious about the theory suggesting property is an absolute hedge against inflation, because of rent increases.
"When people cannot afford the flats anymore you have an empty property which is not good for an investor either," said Böhm.
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