Swedish environmental research foundation turns to hedge funds to enhance the asset mix

Mon Oct 3, 2011

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Mistra is seeking to preserve long-term capital by revisiting asset allocation


By Pirkko Juntunen

Not all institutional investors are alike or have the same issues to grapple with. In Sweden, for example, a number of research-focused foundations were created in the early 1990s, so that their assets could be used to fund research in areas of environment, marine-life, culture and other fields.

The asset base of these foundation funds does not grow by regular payments that gradually increase the capital. This means that over the long term, the reserves will start to diminish and the foundations will have to have to find other solutions to manage the assets to make them last as long as possible. For many, this has meant a move to alternatives such as hedge funds and giving the investment strategy a clearer focus on absolute return strategies.

Mistra, a foundation for strategic environmental research, is one such institution in Sweden. Having an asset base that will inevitably...

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