Universities Superannuation Ups Alts. Bets Five-Fold

Oct 21 2008 | 9:24am ET

While some pension funds are fleeing the troubled hedge fund space, one British pension scheme just can’t get enough of it. In fact, the Universities Superannuation Scheme is set to ramp up its allocation to alternative investments from 4% to 20%.

The £29 billion (US$50 billion) fund said it is increasing its investments in a mixed bag of private equity, hedge funds and commodities funds. USS head of alternatives Mike Powell said the aim of the alternatives portfolio was to deliver equity type returns but with lower risk, Professional Pensions reports.

“In our view the recent turbulence in the hedge fund industry has provided USS with a great opportunity as a new entrant and will make USS a very attractive partner for hedge funds given our long term investment horizon,” said Powell, in an interview.

“The fallout in the industry will also prove to be a great arbitrator of quality and skill amongst the huge number of hedge funds. The size of the allocation is not fixed and we allocate capital to where we see the best risk adjusted opportunities.”


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