AP7, Stockholm, hired K2 Advisors and EIM to handle a total of 912 million kroner ($94 million) in funds of hedge funds, the 24.3 billion kroner pension funds first foray into the asset class, said Daniel Barr, chief actuary.
Each manager will receive 456 million kroner and have a separate mandate, Mr. Barr said. K2 will focus on equity hedge strategies, with target returns of three to six times the U.S. Treasury bill rate and moderate volatility; EIM will concentrate on arbitrage strategies and attempt to earn 8% to 12% returns with volatility of 4% or less, Mr. Barr said.
AP7 has a target allocation of 8% of total assets to alternatives.
New England Pension Consultants assisted.