Aerion Fund Management has chosen Berenberg to manage its £3.5bn active currency overlay mandate. Berenberg was chosen for its risk-orientated and rule-based process to manage the underlying currency exposure of the fund’s overseas investments.

Paul Sharman, CEO of Aerion, said: “As one of the UK’s largest and most innovative pension funds we are always seeking ways to enhance the investment returns that we generate for the members of the fund. By actively managing the currency exposure of our overseas assets we are able to both limit the risks and maximise the potential of holding investments not priced in sterling.”

Tindaro Siragusano, head of asset management at Berenberg said: “We are delighted to have worked with Aerion to deliver a hedging solution tailored to their exact requirements across a wide range of currencies. Against a 50% hedged benchmark, we seek to open the hedge when the overseas currency is appreciating against Sterling and increase the hedge when currencies depreciate. The programme covers both developed and emerging market currencies, and has the potential to significantly increase the Sterling returns generated by the fund’s overseas holdings.”

Berenberg’s overlay management team has been providing quantitative currency risk management solutions to European pensions since 2002. Using a dynamic hedging process that establishes hedge positions using FX forwards when foreign currency markets depreciate, and opens hedge positions when they appreciate, Berenberg’s approach aims to preserve liquidity and ensure that clients with currency exposure maximise positive currency movements.