British Pension Buffer Eyes Private Equity, Hedge Funds

Mar 12 2010 | 8:06am ET

The British pension protection agency is to make its first foray into hedge and private equity funds, and in a big way.

The Pension Protection Fund said this week that it would boost its alternative investments allocation to between 20% and 25%. Currently, the agency, which backstops the country’s pension funds, has only 10% allocated to alternatives—currency and real estate—and none to hedge funds or p.e.

Ian McKinlay, chief investment officer, said PPF was “very deliberately” trying to be more aggressive than the pension funds it serves as a buffer.

“Even though we are investing in private equity and infrastructure we are doing so in a very controlled fashion and will continue with our hedging program that served us very well through the crisis,” he told Reuters.

The nearly £4 billion fund has already has several private equity firms in mind, and will also invest in absolute return funds, McKinlay said.


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