Danish pension fund ATP is making a big move into alternative investments as its seeks to build a portfolio for “all weather.”
CEO Lars Rohde said the US$111.8 billion pension would double its allocation to private equity and pour up to 1 billion krone (US$183.7 million) per year into hedge funds. Currently, ATP has about 5% of its assets in p.e., a figure set to rise to 10%. Its hedge fund investments are managed by its internal alpha team, which currently has 5 billion krone (US$918.3 million) to play with.
Rhode told Reuters that his plan is designed to ensure ATP produces returns despite what the market may throw at it. But he warned hedge fund managers interested in a mandate that his expectations aside from returns are pretty high.
“I want to know what they are doing,” he said. “A fair structure grants transparency and, secondly, I will not go where we are paying all the costs and we would then share the gains”—ATP will seek clawbacks.