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AP1 runs $35 billion as part of Sweden’s state
pension system. Martin Källström is the portfolio
manager responsible for the fund’s $1.6 billion in
hedge fund investments.
In his keynote speech Källström described the
innovative way in which hedge funds are incorporated into
AP1’s overall portfolio for maximum
diversification and protection. On a standalone basis,
AP1’s hedge fund portfolio is very unlike most
'model’ hedge fund portfolios as it is
concentrated in strategies that best complement
AP1’s overall portfolio. This approach requires
courage, Källström said.
Hedge funds defy definition – the term covers all
assets and every investment strategy one could think of, and is
represented by the most brilliant institutional asset managers
in the world as well as one-man shops, he pointed out.
Given these loose parameters, how should institutional
investors approach hedge funds?