July 19, 2007 / 7:16 AM / 12 years ago

Schroders to launch alternatives fund for pensions

LONDON (Reuters) - Fund firm Schroders said on Wednesday it planned to launch a portfolio aimed at pension schemes that will offer a spread of alternative investments, including private equity and hedge funds.

The fund, which is likely to be called the Schroders Completion fund, will be managed by Head of Multi-Asset, Curt Custard, and will be launched in the coming months, Miles O’Connor, the firm’s head of UK institutional sales and client service, told Reuters.

“We want to create a fund that completes overall asset allocation for pension schemes. It will be a wrapped vehicle that will hold private equity, property and hedge funds, when the investment case is right. It will do it on a valuation basis,” he said in an interview.

“It will hold all the things small and medium-sized schemes want to hold but don’t have the governance aspects for.”

O’Connor said the fund’s approach would be similar to that of the firm’s 800 million pound Diversified Growth fund, which uses both internal and external fund managers and which the firm is now offering to overseas pension schemes.

The Completion fund will also consider allocating money to an active currency manager.

After a severe bear market at the start of this decade, pension funds are increasingly looking to alternative assets such as hedge funds and infrastructure to provide returns less correlated to more traditional holdings such as stocks and bonds.

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