Overview and future of the hedge fund industry

Hedge funds are investment vehicles that aim to deliver extra returns using active strategies. Hedge funds exist in all shapes and forms: some take advantage of differences in various currency valuations across markets, some speculate in the commodities markets, some infuence the structure and management of investee companies to realise greater returns, and there are many other hedge fund strategies.

It is specialised work requiring know how and a network to select the consistently best performing  hedge funds out of the thousands of funds.

Adding a hedge fund tot he investment portfiolio might help mitigate the total risk present in  the combined investments a pension fund holds. A pension fund must be in control of its investments, including aware of the risks involved. Man Investments offers Managed Accounts. Independent of Man Investments, the trades and the risks involved are reported for a pension fund to decide which risks are indeed acceptable, and which aren’t, enabling a pension fund to remain in control over its hedge fund investments.

Pension Funds, Risk Allocation and Alternative Investments

Prof. dr. Van Wijnbergen gave a presentation argueing against hedge funds.

Presentatie PartnersGroup

The Swiss private equity firm PartnersGroup explained that private equity is an extension of the investment category of stocks. Stockpickers select stocks of companies that ere listed on a stock exchange whereas private equity investments are made in private, not listed companies, such as for example  family companies.

PartnersGroup also offers infrastructure investments. These are investments in for example highways, toll roads but also include airports, ports, and prisons. Infrastructure is an extension of the investment category of real estate, with a different risk and return profile.

Private equity is present almost everywhere in our daily lives, PartnersGroup showed, with investments in supermarkets such as Action in the Netherlands.

Presentatie Kohlberg Kravis Roberts

KKR invests in private equity worldwide. The firm was known originally for its Leveraged Buyouts whereby the current owners of a company are bought out by the private equity firm  with money lent from a bank, after which the company is made profitable and more efficient. In the Netherlands KKR employes some 15,000 staff through its investments in different companies.

To find an opportunity that may lead to a deal KKR has got teams searching for opportunities worldwide. On average, out of every 100 companies that are researched to see whether a deal is in the cards, only one turns out to be successful.

Presentatie door Guido Roth

Summarising his presentation for Dutch pension funds te key message was that pension funds shoud always be aware of the legal mandate and boundaries of external supervisory authorities. It is in the interest of pension funds to manouver strategically when dealing with an external supervisory authority , especially i the case of a (coming) legal dispute.