Nordea cutting alternatives after shift to unit-linked products

Heightened lapse risk ends 20-year "romance" with hedge funds, says Nordea Life & Pensions CIO

Nordea Life & Pensions plans to cut allocations to alternative assets, blaming high fees and changes to liquidity risk as the firm moves to providing more unit-linked products.

Although the Nordic insurer has been a big investor in alternatives – investing as much as 20% of assets backing guaranteed insurance products in hedge funds, private equity and real estate – higher lapse risk for new-style unit-linked policies is forcing a change.

"Almost two decades of romance might be coming to an