One of the largest pension funds in the world is close to using hedge funds, a move many of its peers have already made.
The United Nations Joint Staff Pension Fund, which managed $52.4 billion as of January on behalf of more than 190,000 participants, is in the final stages of deciding how it will add to its mix of alternative investments.
The U.N. is considering investing directly in external money managers or using a broader fund of hedge fund structure—or both—according to a person familiar with the situation. Either way, the pension staff views hedge funds as an important portfolio diversification tool that would add to current alternative investments in private equity funds and a non-hedge fund vehicle managed by Ray Dalio's Bridgewater Associates.
Buck Consultants, an external advisor to the pension plan, is set to complete a study as early as this summer that will recommend the best approach to investing in hedge funds for the first time, including in what amount, according to the person.
A spokesman for the U.N. secretary-general declined to comment on the hedge fund plans. Buck, which is owned by Xerox, also declined to comment.