Asia-Pacific-Based Public Pension Funds and Superannuation Schemes in Hedge Funds

by Vivian Goh

  • 12 Feb 2016
  • HF

Preqin’s Hedge Fund Investor Profiles database on Hedge Fund Online contains detailed information on 118 public pension funds and superannuation schemes located in Asia-Pacific. Similar to their US- and Europe-based counterparts, Asia-Pacific-headquartered public pension funds and superannuation schemes are active investors in hedge funds, with 55% currently investing or considering investing in the asset class.

When investing in the asset class, more than half (55%) of public pension funds and superannuation schemes prefer to employ long/short equity strategies. Large proportions also target multi-strategy funds (50%). Nearly 90% of these institutions target hedge fund investments globally, although significant proportions will invest closer to home targeting investments in Asia-Pacific (75%). When looking specifically at Asia-based public pension funds and superannuation schemes investing in hedge funds, the vast majority (86%) invest globally; however, larger proportions will target their domestic region (43%) than invest in the more traditional markets of North America (36%) and Europe (29%).

Despite macroeconomic issues affecting institutional investors’ confidence in hedge funds to achieve portfolio objectives, many investors in the Asia-Pacific region will continue to be active in the hedge fund space over 2016. Taiwan-based Labor Pension Fund intends to make between one and three global-focused multi-strategy fund of hedge funds investments over the next year, while one of the largest pension funds in the region, National Pension Service, is planning its maiden hedge fund commitment. The KRW 495tn South Korea-based fund will allocate up to 0.5% of its total assets to funds of hedge funds as part of its efforts to diversify risk through exposure to a range of alternative asset classes.

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