Tate Gallery quits hedge fund investments after a £1m loss

THE trustees of the Tate Gallery have withdrawn from hedge funds after losing £1m on investments.

Gallery chiefs confirmed that £6m of the organisation’s £27m had been invested. But by March 2009 the Tate had liquidated its holdings – with a 17 per cent loss. That was equivalent to a £1m drop in value.

The Tate and Tate Foundation aimed to create a medium-risk portfolio, which led to an allocation between different classes of assets along the lines of other similar investors, according to a spokesman. It invested through third-party managers, Coutts and TriAlpha Fund Managers.

A spokesman said trustees, including Treasury Minister Lord Myners, hedge fund expert Noam Gottesman, former fund manager Carol Galley and former Goldman Sachs investor Scott Mead, believed “the risk/return on hedge funds looked less interesting than in other assets”.

TriAlpha, which merged with ACP Partners a year ago, provided hedge funds only, while Coutts provided a mixture of bonds, equities and hedge funds. The Tate was looking for a rate of return of five per cent a year. It refused to rule out further hedge fund investments in future.