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Wednesday, October 22, 2008

Pension Paradise

Here's a story from Professional Pensions we thought we'd relay without commenting on. We'll leave any judgments up to our readers (who may or may not be happy holders of pensions).

USS plans five-fold increase in alternative investments
Mark Selby


THE Universities Superannuation Scheme is set to increase its allocation to alternative investments.

The £29bn fund’s annual report revealed it is in the process of increasing its alternatives portfolio from 4% to 20% – investing in a mix of private equity, hedge funds and commodities.

USS saw its funding levels drop to 77% in March after rising to 98% in June 2007 using a gilts valuation measure.

USS head of alternatives Mike Powell said the aim of the alternatives portfolio was to deliver equity type returns but with lower risk.

He said: "In our view the recent turbulence in the hedge fund industry has provided USS with a great opportunity as a new entrant and will make USS a very attractive partner for hedge funds given our long term investment horizon.

"The fallout in the industry will also prove to be a great arbitrator of quality and skill amongst the huge number of hedge funds. The size of the allocation is not fixed and we allocate capital to where we see the best risk adjusted opportunities."

1 comment:

Anonymous said...

Ha, they must know something we don't. Not sure about all the other readers out there but I would be short all hedge funds (esp. commodity-heavy ones) with the bid-offer spreads as large as they are. Seems like every day another one goes under.