Korea's flagship state retirement fund has chosen the two asset managers to run a fund-of-hedge-funds mandate of up to $1 billion, which is expected to rise to $2 billion over time.
The Singaporean bank expects demand for hedge strategies to rise this year as investors seek alpha in volatile markets.
Firms with over $1 billion in hedge fund assets accounted for most of last year's AUM growth, while the population of smaller players shrank, according to eVestment.
Franklin Templeton’s alternative arm, K2 Advisors, says funds of hedge funds (FoHFs) offer a complementary option alongside traditional fixed income holdings and can provide a liquid alternative exposure for institutional investors.
The second half of 2013 saw fund-of-hedge-fund assets grow 20% in Asia, while in Europe they suffered a 7% outflow, according to eVestment. Asia hedge fund AUM also grew faster than elsewhere.
The Public Officials Benefit Association is seeking a global fund-of-hedge-funds manager to run a customised portfolio.