Swedish Pension Plan Takes To Hedge Funds

Apr 7 2009 | 9:59am ET

The Swedish Premium Pension Authority has made its first foray into hedge funds by adding Salus Alpha funds, which are UCITS III compliant, to its portfolio.

The funds included in the portfolio are Salus Alpha Real Estate and multi manager funds Salus Alpha Event Driven, Salus Alpha Managed Futures and Salus Alpha Equity Hedged.

“Particularly for retirement provisions it is important to invest in products that are independent of negative market developments,” according to Salus Alpha Group. “Therefore daily liquid UCITS III multi-manager alternative investment funds are the perfect solution for pension funds.”

The firm added that it’s time for the Austrian and German pension funds to rethink their investment strategies by focusing on asset classes that are able to secure the paid-in assets in the current difficult market situation.

“The biggest risk for the future value of a pension is the shortfall risk, especially if an investment product was selected due to assumption of historic performance. Investments in exchange traded funds offer quick and easy market access, however a shortfall seems programmed because the market risk is not managed,” the firm said.

The Swedish Premium Pension Authority currently manages €27.5 billion (US$37.1 billion).

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