23/03/2011 Author: Kapila Gohel

Bexley terminates Man Group FoHF investment

The pensions committee for the London Borough of Bexley has made the decision to liquidate its hedge fund portfolio, following an asset liability study, this month.

The £490m ($792.3m) Bexley Pension Fund currently has a 2.5% allocation to fund of hedge funds (FoHF)  Man Investments, formerly RMF Investment Management. The committee has now decided to terminate the Man allocation due to poor investment performance and to move out of hedge funds completely.

During its meeting this month, the committee noted that the “return on the original £10m ($16.1m) investment in a FoHF [RMF] since 2006 had been disappointing. At the last meeting it had also been agreed that investment in hedge funds should not feature in the long-term asset allocation,” according to the minutes.

Three years ago, at the time of its last asset liability study, Bexley Pension Fund had actually moved to double its allocation to hedge funds to 5%, HFMWeek reported in 2008. The pension was in the process of increasing its investment with RMF/Man to £20m ($32.3m), Nigel Bate, head of technical finance at Bexley, revealed at the time.
“We were taking steps to do that when the stock markets declined, and it didn’t happen,” said Bate.

The pension made its original £10m (£16.3m) investment in RMF in 2006. The FoHF was acquired by Man Group in 2002.