Portable alpha programme raises the bar for returns
Bob Hunkeler, vice president of investments at International Paper, talks about how he uses portable alpha to expand the portfolios return horizons via funds of funds and overlays
In 2003, International Paper was set to become one of the initial retirement plans to turn to the concept of portable alpha in an effort to generate enhanced returns. The Stamford, Connecticut-based pension funds goal was to outperform large-cap US equities by using multi-strategy hedge funds, funds of hedge funds and S&P swaps.
Putting the finishing touches on the programme in early 2007, the hedge fund allocation at the $8.5 billion corporate pension fund has grown to more than $760 million.
Bob Hunkeler, vice-president of investments, declined to disclose the names of six new managers hired, but says that International Paper has allocated an additional 5%...