Many institutional allocators spend years building portfolios of single-strategy hedge funds across different asset classes, geographies, and investment styles. Yet there is also a distinct subset of investors that prefer to access hedge fund alpha through large multi-manager and multi-strategy platforms. The appeal lies not only in diversified return streams and reduced key-man risk, but also in the institutional infrastructure, centralized risk management, and portfolio construction expertise these firms provide. Two Nordic allocators discuss why multi-strategy hedge fund platforms have become a preferred route for accessing hedge funds.
The Nobel Foundation: Outsourcing Complexity to Large Platforms
The Nobel Foundation, the private institution responsible for safeguarding Alfred Nobel’s legacy and financing the Nobel Prizes, has historically allocated a meaningful share of its portfolio to hedge funds, with a strong preference for diversified multi-strategy managers. With total assets of approximately SEK 6.7 billion, the Nobel Foundation has concentrated its hedge fund exposure in a small number of large multi-strategy platforms. CIO Ulrika Bergman and the investment committee see this as the model that has delivered the strongest risk-adjusted returns for the foundation. It also fits the realities of a lean investment team.
“We don’t have many hedge funds in the portfolio given our asset base, so most of them are multi-strategy,” Bergman tells HedgeNordic. “The allocation has produced strong risk-adjusted returns for us over multi-year periods, and that is the main reason we stay with the model. Our team size reinforces the choice but isn’t the starting point.”
“We don’t have many hedge funds in the portfolio given our asset base, so most of them are multi-strategy. The allocation has produced strong risk-adjusted returns for us over multi-year periods, and that is the main reason we stay with the model.”
Ulrika Bergman, CIO at the Nobel Foundation.
Bergman stresses that hedge fund portfolio construction ultimately needs to reflect the realities of the investing organization itself. “You have to consider what type of organization you are, what advantages and disadvantages you have, and how that shapes your hedge fund strategy,” she says. While niche hedge fund strategies may have offered attractive opportunities, managing a broad portfolio of single-strategy managers would have required significantly greater internal resources. “I’m not saying it’s wrong to allocate to more niche strategies within hedge funds, but doing so would require a much larger team on our end,” she notes. “We let the multi-strategy managers handle allocation across the underlying strategies because they do it better than we could internally. Their risk infrastructure and the talent they have access to would be difficult for us to replicate at our scale, and the results have been very good.”
“We let the multi-strategy managers handle allocation across the underlying strategies because they do it better than we could internally.”
Ulrika Bergman, CIO at the Nobel Foundation.
Bergman also points out that access is a real part of the story. The leading multi-strategy platforms tend to be capacity-constrained, with selective onboarding. “We have been able to build allocations with several of the top platforms over time. That access is hard to replicate, and we don’t take it for granted,” she says. “Operationally the model is efficient as well. The manager handles allocation and risk across the underlying strategies, which lets us focus our due diligence on what matters most for these investments: platform-level governance, the risk framework, and how the manager retains its key people.”
Apoteket’s Pension Fund: Access, Relationships, and Risk-Adjusted Returns
Apoteket’s Pension Fund, one of Sweden’s largest hedge fund allocators, similarly builds a portfolio with a bias toward multi-strategy hedge funds. Under CIO Gustav Karner, the pension fund has generated one of the highest Sharpe ratios among Sweden’s larger institutional investors, despite operating with a relatively small investment organization. A substantial allocation to hedge funds, particularly diversified multi-strategy platforms, has been a major contributor to that outcome.
“Multi-strategy funds probably suit us better compared to other types of strategies, because of the stable return and well-managed risks.”
Gustav Karner, CIO at Apoteket’s Pension Fund.
“It really depends on how you define multi-strategy, but about half of our hedge fund portfolio consists of multi-strategy managers,” Karner explains. While some managers retain biases toward certain trading styles or market segments, Karner believes the multi-strategy model is particularly well suited to the pension fund’s structure and objectives. “Multi-strategy funds probably suit us better compared to other types of strategies, because of the stable return and well-managed risks,” he says, while emphasizing that standalone managers still play an important complementary role.
“It’s all about relationships. I’ve known several founders for 15 to 20 years, and that makes a difference.”
Gustav Karner, CIO at Apoteket’s Pension Fund.
Access, however, remains one of the defining characteristics of the multi-strategy hedge fund universe. The most sought-after managers are often capacity constrained, resulting in higher fees, longer lock-up periods, and highly selective onboarding processes. Karner notes that relationships become critical in securing allocations to top-tier firms. “It’s all about relationships. I’ve known several founders for 15 to 20 years, and that makes a difference,” he says. Even though Apoteket’s Pension Fund is relatively small in global institutional terms, its long-standing commitment to hedge funds and reputation within the market helps it maintain access to highly competitive managers.
Beyond Convenience
The preference among these institutional allocators for multi-strategy hedge fund platforms reflects broader realities in hedge fund investing. Building and maintaining a diversified portfolio of specialist hedge funds requires substantial operational resources, deep manager networks, and continuous oversight. For many institutions, particularly those with lean internal teams, large multi-strategy platforms offer a more scalable and efficient way to access hedge fund alpha while outsourcing portfolio construction, risk management, and strategy allocation decisions to firms with extensive infrastructure and specialized expertise.
At the same time, these allocators are not simply outsourcing complexity for convenience. Rather, they increasingly view multi-strategy hedge fund firms as institutional ecosystems capable of navigating a wider range of market environments, dynamically reallocating capital across opportunities, and managing risk in ways that are difficult to replicate internally. As competition for top-tier managers intensifies and institutional investors continues to prioritize resilience and consistency alongside returns, diversified multi-strategy platforms appear likely to remain a central component of hedge fund portfolios.
