Ruukki, the E530m pension fund for the Finnish steel and metal company, has outsourced parts of its equity portfolio and increased its exposure to hedge funds.

Ilkka Arjaluoto, the fund’s CIO, told epn that the fund has recently outsourced one third of its equity holdings to four different asset managers.

“Our new mandates consist of an emerging market brief, a Nordic one, which includes Finland, and two other foreign mandates,” he said.

“By outsourcing a large part of our foreign equity holdings we aim to bring additional value to our portfolio,” Mr Arjaluoto explained.

Ruukki has also increased its hedge fund exposure from 1 to 4 per cent during 2005.

“We invest in five different hedge funds. The largest one of them is a fund-of-fund and the other four are single. We have appointed AIM to take care of the selection, management and reporting on our hedge funds,” said Mr Arjaluoto.

The expansion of Ruukki’s hedge fund holdings and revised strategy for foreign equities has taken place at the expense of the fund’s bond investments. During 2005, the fund’s bond portfolio has been cut down from 58 to 48 per cent of the total portfolio.

“We are observing the increase of interest rates on a daily basis and planning how we could best manage the risk with the large bond exposure that we currently have,” said Mr Arjaluoto.

Earlier this year Ruukki announced that it was considering pushing into commodities. However, the plan has not so far materialised. “We still have not decided what our policy on commodities will be,” confirmed Mr Arjaluoto.
RC

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