EIM has been awarded a €15m hedge fund of fund mandate from Stichting Pensioenfonds TNO (SPF TNO), the pension fund of TNO, the leading provider of independent contract research in the Netherlands.
TNO is the leading independent contract research organisation for companies, government bodies and public organizations in the Netherlands. TNO has some 5,700 employees and in 2001 had consolidated turnover of €514m. research and specialist consultancy as well as granting licences for patents and specialist software. TNO tests and certifies products and services, and issues an independent evaluation of quality. TNO also sets up new companies to market innovations. On the 31st of December 2001, the plan counted approximately 14,000 participants and had over €1.3 billion under management.
The pension fund expects to increase the initial commitment to EIM to €50m by the end of 2004/early 2005. The EIM Group of companies, which has offices in Nyon (Geneva), Zurich, New York, London, Paris, Tokyo, Monaco and Gibraltar, specialises in the global identification of hedge funds, along with the construction and management of tailor-made funds of hedge funds.
SPF TNO is planning to diversify its pension fund portfolio by adding a hedge fund allocation through two funds of hedge funds to be provided by EIM and PAAMCO.
EIM has been appointed to provide strategic allocation to the various SPF TNO hedge fund strategies whilst PAAMCO has been appointed to provide actively managed exposure on the various strategies.
Having invested some €30m in hedge funds in 2003, TNO will increase its allocation to hedge funds over the next two years from €30m to €100m to be split equally between EIM and PAAMCO.
Hilton Supra, Senior Marketing Manager EIM (United Kingdom) Limited, commented: "This mandate strengthens further EIM's commitment to the Netherlands and we recognize the bold steps Dutch pension funds are taking by allocating some of their assets to hedge funds. Choosing a specialist fund of hedge funds manager like EIM to tailor-make a portfolio specifically for their objectives leads the way forward in the continued development of institutional hedge fund investing against a background of funds pedaled as a one size fits all approach."
FundPartners advised SPF TNO on its process of awarding these mandates to EIM and PAAMCO.
Dr. Erik van Ballegooijen, Director at Stichting Pensioenfonds TNO, said: "In conjunction with our consultants FundPartners we conducted an extensive process, screening the universe of fund of hedge fund providers in Europe and in the US. Sixteen managers were invited to tender before we finally awarded a mandate to EIM and PAAMCO".
"The interest for hedge funds stems from a further diversification of the equity portfolio, especially with investments with low correlation with the listed markets and an interest in absolute return strategies. The first reason contributes to a lower risk profile and the second reason is more fundamental, since the pension industry is in fact an absolute return business given their liabilities and can not be driven by beating benchmarks".
"The pension fund has chosen EIM because EIM met a long list of demands, of which transparency, stable performance, assets under management, time of existence of the company, stability in personnel, investment styles and risk control were the most important. EIM was chosen because they meet these demands and because the pension fund believed they could fulfill a specific role in the investment process of the pension fund."
EIM was founded in 1992 by Arpad Busson. The EIM Group has, since 1992, allocated on behalf of clients, USD7.5 billion to third-party money managers, which includes more than USD3.5 billion of assets currently under management. It is a specialist asset manager for institutional investors and high net worth individuals in delegated investment management; a management approach based on the evaluation, selection and allocation of assets to the best specialist managers, both alternative and long-only investments, globally.
copyright hedgeweek 2003