WEST PALM BEACH, FL (www.hedgeco.net) – The Trustees of South African Pension Funds will soon be making some hard decisions whether they should begin investing with hedge fund managers. Such decisionwill not be an easy one because South African Pension funds like other pension funds elsewhere are inherently conservative in their investment philosophy. The managers will have to ultimately decideif investing their retiree\u00c3\u00af\u00c2\u00bf\u00c2\u00bds assets in hedge funds is a strategy for them or not.<\/p>\n
According to news reports, the South African Treasury will be making some changes in Pension Funds laws, such changes may reduce portfolio investment risks, which may also lift some restrictions on investments and asset classes in which pension funds can invest. Diversification benefits of hedge funds may be of interest to pension funds particularly in this era of stock and equity market volatility.<\/p>\n
Current South African laws are unclear and confusing on hedge fund investing, but the new reforms will make it easier for pension managers to invest some of their portfolio assets in hedge fund managed vehicles, without breaking the nation\u00c3\u00af\u00c2\u00bf\u00c2\u00bds investment laws.<\/p>\n
Hedge fund industry analysts believe that the difficult equity and bond markets, added to falling mortality rates and the baby boomer generation nearly approaching retirement, leaves pension funds looking for ways to help them enhance returns. Stephan Breban, CEO of the UK-based City Capital Partners and a veteran of the international hedge fund industry, told conferees at recent conference in South Africa that \u00c3\u00af\u00c2\u00bf\u00c2\u00bdpension funds will have to get their diversification from alternative investments, as offshore markets exhibit rising correlation, these instruments will be playing a significant role in pension fund investing worldwide in the future.\u00c3\u00af\u00c2\u00bf\u00c2\u00bd<\/p>\n
Mr. Breban further said that hedge funds can help pension funds lower volatility and risk through their diversification potentials, but in order to invest in hedge funds, the pension fund trustees will need more education, time and money in order to make wise investment choices.<\/p>\n
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net<\/p>\n
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