Kodak Retirement Income Plan (KRIP) is the seed investor for AlphaEngine Global Investment’s SMART Alpha investment program, an absolute return strategy that focuses on generating strong absolute returns, especially during periods when equity beta and typical absolute return strategies struggle to perform (eg, 2008 and 2011) and when typical corporate pension liabilities rise.
Timothy Barrett, Director, Pension Investments Worldwide at Kodak, says: “KRIP has a long and positive history of implementing innovative investment strategies. As a corporate pension plan, we need strategies that can generate strong returns which truly diversify asset risk, and have a positive correlation to liabilities. The SMART Alpha program leverages positive performance they generated for clients in 2008-2009 through SMART Rebalancing, and creates a much more effective strategy for a corporate pension fund.”
Arun Muralidhar, Chairman and co-CIO of AlphaEngine, says: “We are honoured to have KRIP as a seed client for SMART Alpha. KRIP has a proven reputation as a well-run, innovative fund and many of the managers they seeded are industry legends. Our SMART Rebalancing generated strong returns for pension funds in 2008, when most other funds (pension funds, endowments, foundations, and even fund of hedge funds) underperformed. This reinforced our conviction that funds carry many implicit risks that can be managed through an innovative absolute return product. Pension funds cannot pay benefits with “less losses” and, hence, any attempt to de-risk must ensure a return that exceeds the return of the liabilities. The evaluation process was extremely comprehensive and Tim, his colleagues, and consultants gave us valuable feedback to improve the product. ”