Investment in Partners Group’s proprietary Alternative Beta Strategies now exceeds USD1bn following a USD200m investment in the hedge fund replication programme by the Universities Superan
Investment in Partners Group’s proprietary Alternative Beta Strategies now exceeds USD1bn following a USD200m investment in the hedge fund replication programme by the Universities Superannuation Scheme, one of the five largest pension funds in the UK with some GBP30bn in assets.
The investment with Swiss-headquartered Partners Group represents one of the first in alternative assets by the universities pension fund, following the decision of its investment committee to invest up to 5 per cent of total assets into alternative investments by 2008 and up to 20 per cent over the medium term.
The Alternative Beta Strategies programme, which has been running since October 2004, aims to provide investors with cost-efficient and well-diversified access to hedge fund returns. It is designed to create a multi-strategy hedge fund product that replicates hedge fund returns by identifying their generic risk premiums.
The programme offers daily liquidity at net asset value and seeks to outperform the hedge fund strategy indices with which it is highly correlated. Its total performance last year was 11.6 per cent net of all fees.
According to Partners Group, Alternative Beta Strategies has attracted investment from blue-chip investors across Europe and North America, bringing the programme’s total assets to more than USD1bn, comprising reallocations of existing fund of hedge funds assets and new inflows.
Peter Moon, chief investment officer for the Universities Superannuation Scheme, says: ‘We believe the emergence of replication strategies represents an important milestone in the development of the hedge fund industry, enabling investors like USS to access hedge fund type returns in a more cost-efficient, transparent and liquid manner.
‘This investment represents an important first step for USS in our absolute return strategies investment programme. Partners Group has shown itself to be the industry leader in this field with a unique investment approach and an established track record. We look forward to a successful long-term relationship.’
Dr Lars Jaeger, the partner at responsible for the development of the Alternative Beta Strategies programme, adds: ‘We are delighted to start this relationship with the Universities Superannuation Scheme as an investor in the programme.
‘The entry of USS underlines our assessment that the alternative beta investment paradigm will have a lasting effect on the hedge fund industry, as investors react to the dominance of alternative beta in hedge funds’ return profiles. The fee savings, high degree of transparency and liquidity are major advantages compared with the traditional ‘2/20 Cayman’ model.’
Based in Zug, Switzerland, with offices in New York, London, San Francisco, Singapore and Guernsey, Partners Group is majority-owned by its 34 partners and principals as well as its more than 200 employees.
It manages assets of more than over CHF17bn in private equity, private debt, private real estate, infrastructure and hedge fund investments on behalf of institutional investors, private banks and distribution partners through a broad range of funds, structured products and customised portfolios.
