A major Dutch pension fund is looking to redeploy more than US$1 billion from funds of hedge funds to direct hedge fund mandates.
PGGM, which manages the € 87 billion Pensioenfunds Zorg en Welzijn, plans to redeem all of its funds of hedge funds investments, which total about €1.2 billion, Pensions & Investment reports. The pension would then invest that money in single-manager funds, with risk management dealt with internally.
Fons Lute, managing director of alternative strategies at PGGM, said the pension’s fund of funds exposure—accounting for some two-thirds of its €1.7 billion hedge fund portfolio—was showing too much overlapping beta exposure.
PGGM is expected to award most of the new mandates by the end of the year.
The pension will not invest in either fixed-income or merger arbitrage funds. It will also limit its investments in market-neutral and equity long/short strategies.