The local government pension fund has invested via FOHFs since 2001, but now plans to diversify into direct investment to improve returns and transparency
By Pirkko Juntunen
Finnish institutional investors have embraced hedge fund investments over the past few years and, despite the fall in equity markets in 2008, institutional investors in Finland still invest an average of 4.3% of total assets in hedge funds. Compared to the figure of 5% at the end of 2008, the allocation has fallen in the first three months of 2009 - but it has remained fairly stable over the years.
Institutional investors dominate the area, despite Finnish legislation that specifically requires that "special mutual funds", the term under which hedge funds are categorised, should be open to retail investors as well. This is a peculiarity of the local market that might make the upcoming UCITS III funds appealing. That said,...