Fri, Oct 21, 2016
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: The changing role of hedge funds in pension plan portfolios

Thursday, May 02, 2013

Shahid Ikram
This article was authored by Shahid Ikram, CIO at Aviva Investors, a global asset manager that is part of Aviva, one of the world’s largest insurance companies, and appeared first in Swiss daily newspaper Le Temps on Monday.

Mounting pension deficits present a dilemma for trustees. New cash from plan sponsors is in short supply and projected returns from mainstream assets are unlikely to close the funding gap. We believe the answer lies not in taking more risk, but in working smarter by applying hedge funds as part of a coherent risk-budgeting framework across the entire portfolio.


Mounting deficits are forcing pension plans to rethink their approaches to investment and portfolio construction. The root of the problem lies in schemes’ historic over-reliance on equities, which have produced disappointing returns. These, combined with falling bond yields and rising life expectancy have exacerbated the divergence between plans’ assets and liabilities. As a result, trustees often look to asset managers for solutions that will make pension assets "work harder", often by assuming higher levels of risk. However, a pension fund that is already in deficit is likely to have a tight risk budget and can ill-afford risking precious (and potentially irreplaceable capital) in higher-risk strategies. We believe that the answer to this dilemma lies in working smarter, not harder, by developing more intelligent......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. M&A - U.S. hedge fund HarbourVest is shock winner in the £1.1bn SVG Capital takeover saga, Hedge fund Parvus shows hand, toppling William Hill merger deal[more]

    U.S. hedge fund HarbourVest is shock winner in the £1.1bn SVG Capital takeover saga From The fierce battle to buy Britain's biggest private equity group has come to an unexpected conclusion, with the original bidder walking away with the prize. SVG Capital has agreed

  2. Marc Lasry: Energy is still a phenomenal opportunity[more]

    From Distressed debt specialist Marc Lasry said energy debt is still a "phenomenal opportunity" because investors can get "massively overpaid" for the risk they take on. There are "huge opportunities" in the energy sector especially in restructurings, the Avenue Capital Group CEO said Tues

  3. Opalesque Exclusive: Ex-SAC manager re-emerges with market neutral hedge fund[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: A manager re-emerged from the SAC battleground last year to launch his own hedge fund under the umbrella of New York-based investment firm Endicott Group.

  4. North America - Hedge-fund manager Kyle Bass says the U.S. is on track for stagflation, Billionaire hedge fund titans Dinan, Lasry on election, markets and best investment ideas[more]

    Hedge-fund manager Kyle Bass says the U.S. is on track for stagflation From Kyle Bass, founder of Hayman Capital Management, on Wednesday warned that the U.S. is headed toward so-called stagflation. Stagflation is typically described as persistently high inflation and hi

  5. Macro hedge funds up 3.3% in one week on Fed and Brexit pays off[more]

    Komfie Manalo, Opalesque Asia: Hedge funds were boosted by the strong performance of global macro funds, with the Lyxor Global Macro Index gaining 3.3% as of the week ending Oct. 11 (-1.7% YTD), Lyxor Asset Management reported. Their short on the p