By Claire Makin
Last year, PGGM, the healthcare and social workers pension fund, stirred up a hornet’s nest of publicity by announcing that it would withdraw from funds of hedge funds. Instead, the $142 billion Dutch pension fund service provider said that it would be taking direct responsibility for selecting and monitoring its own hedge fund investments.
The Netherlands’ largest institutions are used to being in the public eye, not least because they are innovators, but also because the country’s social contract holds them accountable to their investors – a duty that they take very seriously.
Against this background, PGGM reasoned that investing directly in hedge funds would cut costs by removing the extra layer of fees charged by funds of funds. As well as saving money, head of hedge funds Jan Soerensen said that the move would help PGGM to achieve full portfolio transparency and to have direct...