The UK Railways Pension Schemes, one of the UK’s largest plans, has invested 65 million pounds in London-based asset manager Goodhart Partners’ global long-short equity fund of hedge funds.
Railpen Investments, the fund manager of the industry-wide scheme with assets of over 15 billion pounds, has some 8 percent of its assets in hedge fund strategies.
“Goodhart’s Long-Short fund offers large institutions exposure to small and specialist hedge fund managers, with the degree of governance and due diligence these allocations require,” said Paul Jeffries, an investment analyst at Railpen.
Long-short funds allow hedge fund managers to hedge risk in portfolios by betting that unfavoured stocks will decline in value.
Poor performance from hedge funds in 2008 raised fears that long-term investors such as pension schemes would stop making allocations to the funds.
Most pension schemes have stuck with the industry, with Britain’s second largest pension scheme USS and the West Midlands Local Authority plan both going ahead with their plans to invest in hedge funds.
Goodhart was formed in 2009 through the management buyout of the multi-manager business from WestLB Mellon Asset Management. At June-end, it managed 326 million pounds across three investment strategies.