Nordic investors favour hedge funds over PE

Nordic investor allocations to alternative assets continue to grow, but the preference for these investors is to increase allocations to hedge funds rather than private equity. The findings are revealed in the survey Nordic Alternative Investments Survey by Prospera Research conducted on behalf of IPM Informed Portfolio Management and AIMA, the Alternative Investment Management Association. Around 100 of the largest Nordic institutions were interviewed between June and September this year with a response rate of 90%.

The survey reveals that over 60% of large Nordic pension funds, life insurers and foundations are invested in private equity and/or hedge funds. The average allocation to private equity and hedge funds in the Nordic region is 2% of the institutions’ overall portfolios and this looks set to increase over the next two years, according to the survey.

Average allocation varies across the region with Finland committing 6%, Sweden 4%, Denmark 2% and Norway 1%.

Lars Ericsson, partner at IPM, said: “In response to moderate equity return expectations investors look to add more active investment strategies to their portfolios. More than half of investors plan to procure new hedge fund managers and a third plan to hire private equity managers within the next two years.”