Lonmodtagernes Dyrtidsfond, Frederiksberg, Denmark, hired Goldman Sachs Asset Management to run a smart beta equity strategy.
The 35 billion Danish kroner ($5.5 billion) pension fund, known as LD Pensions, launched a search in October.
The size of the allocation managed by GSAM will depend on the assets in the "Holiday Allowance fund," which is highly uncertain at this point, Kristoffer Fabricius Birch, head of equities, said in an email.
Starting Sept. 1, LD Pensions will manage two separate pension funds: the existing Lonmodtagernes Dyrtidsfond section and a new "holidays" fund, Lonmodtagernes Feriemidler, according to its website. The new fund was established following the introduction of Denmark's Holidays Act, which also takes effect in September but has been subject to a transition year. All holiday allowance amounts earned by participants during the transition year will be managed in the new fund, for which LD Pensions has overall responsibility. The fund is expected to have 100 billion kroner in assets, LD Pensions' website said.
However, the smart beta allocation "will get a decent share of our existing equity allocation to start with" and will be allocated to from both the LD portfolio and the new section. LD Pensions had a 22.9% allocation to listed equities as of Dec. 31, showed the fund's latest annual report.
The smart beta allocation is not a direct replacement for another investment, but LD Pensions did invest in a smart beta strategy "through one of our Danish peers," Mr. Birch said. "The rest of the allocation will come from our other existing mandates."
He did not disclose further information.
