Hospital Authority drops two managers

02 June 2011   Category: News, Hong Kong   By Hui Ching-hoo

The Hospital Authority Provident Fund Scheme (HAPFS), the ORSO pension scheme of Hong Kong’s Hospital Authority, has terminated two investment managers; one is FRM for its fund of hedge fund (FOHF) strategy and the other is for emerging markets.

Heman Wong, executive director of HAPFS, says that the fund has short-listed three FOHFs and will soon be appointing one firm this summer. “The due diligence has been completed so we are now in the final process,” he says. Mercer assisted in the manager selection.

FRM previously managed a US$100 million mandate for the fund.

“We take fund of hedge funds as a substitute for bonds,” he says. “Given that yields for bonds are now close to zero, we are keen to fund the new mandate,” he adds.

Meanwhile, the fund is looking to replace its emerging markets equity manager. Cambridge Associates was hired recently to undertake the search.

As of end March 2011, HAPFS’s global equity fund and growth fund, which have holdings of 10% and 7.2% respectively in emerging markets, registered a year-on-year growth of 15.4% and 13.2%, respectively. This compared to their benchmarks of 15% and 12.4%, according to the quarterly report. 

At the end of March 2010, HAPFS’s portfolio was worth HK$42.9 billion, up from HK$37.9 billion a year earlier.