Dutch Pension Drops Hedge Funds

Netherlands

The Netherlands’ second-largest pension fund has announced plans to exit its hedge funds investments.

The fund, PFZW, has already began the process of winding down the investments.

The fund cited complexity, lack of performance and excessive costs as reasons for the pullout.

From Reuters:

The Netherlands’ PFZW has become the latest major pension fund to announce it will no longer use hedge funds to manage investments, citing excessive costs, complexity and a lack of performance.

[…]

About 2.7 percent of the fund’s assets had been invested with hedge funds in the year 2013, but the pension fund said on Friday that it had “all but eradicated” their use by the end of 2014.

“With hedge funds, you’re certain of the high costs, but uncertain about the return,” the company’s manger for investment policy Jan Willem van Oostveen said.

He added that PFZW wanted to have greater control over of its investments, and that hedge funds’ methods were too complex because of their diverse investment strategies.

In September, the $300 billion California Public Employees’ Retirement System said it had scrapped its hedge fund programme, pulling out about $4 billion.

PFZW manages $185 billion in assets for the country’s health care workers.

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