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Alternative Market Briefing

Dutch pension PMT to divest hedge fund holdings

Monday, September 22, 2014

Bailey McCann, Opalesque New York:

Dutch pension - PMT, the €55bn fund for metal workers is divesting all of its hedge fund portfolio. The pension says hedge funds are too expensive and is going into residential mortgages. The pension had a €1bn hedge fund allocation.The announcement comes on the heels of CalPERS unwinding its entire hedge fund portfolio also citing the expense versus performance ratio.

The pension says that after an evaluation of its holdings, the market "has too many players," and the fees were too expensive for what they are getting. Hedge fund investments in the portfolio account for 32% of the fees, for only 0.54% of the holdings.

The pension will take that money and allocate to the Dutch Mortgage Funding Company (DMFCO) instead. DutchNews.nl says that three pensions are going in on the investment amounting to €2bn for the local housing market. PMT, the Hoogovens fund and the fund for the printing industry have set up a special company named Munt Hypotheken to manage their mortgage investments.

"This is the first time pension funds invest directly in mortgages without a bank as an intermediary," said director Jeroen Looman in a statement.

IPE notes that the investment means that pensions have effectively skipped over Dutch residential mortgage bonds, soon to be launch......................

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