Port of London Authority Pension Fund, Gravesend, England, hired J.P. Morgan Asset Management and Prisma Capital Partners to run £25 million ($37 million) each in hedge funds of funds, confirmed Bill Bean, manager of the £250 million fund.
It is the pension fund's first investment in hedge funds of funds.
Funding comes from reducing a U.K. bond fund run by AXA Investment Managers; AXA continues to run £155 million.
The move was made as a way to boost returns following a triennial asset-liability study. “As with most U.K. pension schemes facing deficit … increasing the equity allocation would have provided too much volatility,” said Simon Martin, investment principal at Aon Consulting, which performed the study. Mr. Martin added that hedge funds of funds were a better liability match, too.
Aon conducted a shortlist search for the pension fund.
Mr. Martin said each fund of funds comprises about 30 to 40 underlying hedge funds.