The West Yorkshire Pension Fund (WYPF) is to invest GBP 260 million (approx. 5% of its GBP 5 billion assets) over the next 3 to 4 years in five fund of hedge fund managers.
The WYPF, one of the largest UK local government pension schemes, made the decision at a special meeting of its Investment Panel on 10 February 2005.
The five funds of hedge funds across which the GBP 260 million will be invested are managed by:
* Arden Asset Management Inc.
* Aurum Funds Limited
* Credit Agricole Alternative Investment Products Group
* Quellos Capital Management
* Signet Capital Management Limited.
Stuart Imeson, Head of Pensions and Investments at WYPF, said: "The five fund of hedge funds managers selected will provide a diversified and complementary mix of strategies and styles, and we are looking for the managers to deliver annualised returns of at least 7.5% net of fees. The move into hedge funds by WYPF will create extra diversification within the overall investment portfolio and should provide the opportunity to preserve capital irrespective of market conditions".
Signet Capital's Seymour Banks said: "We are a business with USD 800 million aum and we have established a strong reputation over the past ten years which has been recognised by several recent industry award nominations and wins, but it's another thing to be awarded recognition from one of the largest pensions in the UK."
Banks added: "The headlines tend to be dominated by the larger FoHFs, but capacity issues are coming to the fore and we are well-placed to pick up further mandates. The WYPF mandate has been allocated to the Signet Global Fixed Income Fund, a USD 150 million multi-strategy product with no long/short equity. Its key features are capital preservation and the maximum drawdown of 1.35% since inception in July 1999."
The strategic decision to invest 5% of the total investment portfolio in hedge funds was taken by the WYPF's Investment Panel in July 2004. Since then a detailed selection process was embarked upon, which started with a comprehensive tendering exercise and culminated with the selection of the five fund of hedge funds managers on 10 February.
bfinance has assisted WYPF by providing detailed analytical and technical support
throughout the selection process.
Councillor Ian Greenwood, Chair of WYPF's Investment Panel, said: " I am pleased that
WYPF has been able to appoint five experienced and very capable fund of hedge funds managers. They demonstrated to the Panel an excellent track record of performance, achieved by adopting a prudent and stable approach to hedge fund management".