LONDON (HedgeWorld.com)–The Dorset County Pension Fund is the latest U.K. investor in Pioneer Alternative Investment’s Momentum AllWeather Sterling Fund.
Dorset’s alternative investment allocation is 5% and is meant to provide further diversification and absolute returns over cash, according to a statement from the ₤694 million (US$1.2 billion) fund. With this latest allocation, half of Dorset’s fund of funds assets now are in the Sterling Fund.
The pension fund’s latest stats from 2003 showed a negative return of almost 20%, while the number of contributors to the plan grew over the course of the last year. The Dorset County Council administers the fund, handling the pensions of 37,000 public sector employees in the county.
The ₤22.5 million hedge fund mandate is invested in Pioneer Alternative Investment’s flagship Momentum AllWeather Fund, a low volatility fund of funds. Nigel Meir, head of Pioneer’s U.K. sales and distribution, said in a statement that the fund’s track record complements the risk control and liability models used by defined benefit funds.
“Our own research also reveals that concerns remain amongst institutions regarding unquantifiable risk in the hedge fund industry,” Mr. Meir said. “… The case for allocating to funds of hedge funds is powerful if the credentials are right: they can bring good diversification to a portfolio and a fund like AllWeather has the potential to deliver reliable returns.”
Pioneer’s recent research showed that almost 50% of U.K. pension funds have invested in hedge funds or are considering it (see ).
Contact Bob Keane with questions or comments at: [email protected].