Institutional investors: Nordic institutions add to allocations

Tue Sep 4, 2007

When institutional investors in many markets around the world were still trying to come to terms with the concept of hedge funds as an asset class, Scandinavian institutions were already making allocations to hedge fund strategies. The early implementation, in the mid-1990s, of an enlightened regulatory framework in Sweden and Finland, specifically, made hedge fund investing credible and attractive.

Until now, Nordic hedge fund managers have been very successful in attracting a significant portion of institutional assets. Given the smaller size and intimacy of the local hedge fund industries, institutions will often follow long-only managers into the hedge fund world whom they know well and therefore trust. The outperformance of so many Nordic managers, compared to their foreign counterparts, also makes domestic hedge funds additionally appealing to domestic institutional investors.

However, many Nordic pension funds and insurers have external as well as internal portfolio management teams who are increasingly offering...

ISSN: 2151-1845 / CDC10004H

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