Two European pension funds have made commitments to hedge funds as part of a growing trend. The E1.3bn pension fund of Dutch research institute TNO has allocated E30m to hedge funds, while in the UK, the Kvaener pension fund has allocated £25m (E35m).
The Rijswijk-based TNO has awarded two E15m multi-strategy, fund of hedge funds portfolios, one to to Pacific Alternative Asset Management Co (PAAMCO) in London and the other to E15m to EIM in Switzerland, says Henk Bogerd, investment manager at the fund. He adds the cash was taken from equities managed by a Dutch asset manager.
TNO director Eric van Ballegooijen says: “In conjunction with our consultants FundPartners we conducted an extensive process, screening the universe of fund of hedge fund providers in Europe and in the US. Sixteen managers were invited to tender before we finally awarded a mandate to PAAMCO and to EIM.
“Our interest in hedge funds stems from a further diversification of the equity portfolio, by means of investments with low correlation with the listed markets and an interest in absolute return strategies,” he says.
Kvaener has awarded the hedge fund of funds mandate to JP Morgan Alternative Asset Management. This is the first time Kvaerner has taken the decision to employ a hedge fund strategy in managing its pension assets.
John Starling, vice president , of group pensions at engineering firm Aker Kvaener comments that the trustee of the Kvaerner Pension Fund was seeking to reduce the risk in the fund. The fund was looking for alternative investment with equity-like returns and bond-like volatility.

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