Pensioenfonds Zorg en Welzijn, Zeist, Netherlands, is searching for direct hedge fund managers to run about €1.2 billion ($1.6 billion) combined, said Fons Lute, managing director alternative strategies at PGGM, which manages the €87 billion fund.
PGGM will terminate all of its hedge fund-of-funds managers, which currently run about two-thirds of the fund's €1.7 billion hedge fund portfolio, because together they gave the fund excess overlapping beta exposure, Mr. Lute said. He would not name the managers.
PGGM will instead invest directly in hedge funds and handle risk management internally.
The new portfolio will have limited exposure to market-neutral and long/short equity strategies, and PGGM will not invest in fixed-income arbitrage or merger-arbitrage strategies.
Mr. Lute said the transition to direct hedge funds will be mostly complete by the end of 2010.
