British Telecommunications Pension Scheme, London, is considering adding an active commodities strategy, said Nigel Labram, executive director of strategy and alternative assets for Hermes Investment Management, which manages the £35 billion ($67 billion) pension fund. Speaking today at the National Association of Pension Funds Investment Conference in Edinburgh, Mr. Labram said an active commodities strategy could help diversify risks since commodities are negatively correlated with equities. He added that its also a huge opportunity to add alpha.
Although he declined to detail how such a strategy would be funded if implemented, Mr. Labram said it would probably be externally managed. There are others out there who can do the job better than we can, he said in an interview following his speech.
The fund currently has 3% of assets in a passive commodities strategy that tracks the Goldman Sachs Commodities index.