USS has enhanced its in-house hedge fund selection capability in recent months, implementing an absolute return strategies programme and hiring Luke Dixon and Emily Porter to boost its hedge fund team. The funds will be administered by UBS's fund services Ireland operation.

Mike Powell, head of alternative assets at USS, says: "UBS's appointment follows an in-depth review of leading providers. We were impressed with UBS's dedicated fund of funds team and the accessibility of UBS's personnel at all levels to us. After extensive due diligence, we have found that UBS is most receptive to USS' requirements and most qualified to implement our approach."

Don McClean, head of fund services Ireland, UBS Global Asset Management, says: "We are delighted to embark upon this relationship with USS, a sizeable pension fund with an exciting and forward looking alternatives strategy. We look forward to working with them on implementing their Absolute Return Strategies programme."

USS' absolute return strategies programme invests in hedge funds and is expected to boost its exposure to the sector to around a quarter of its total alternatives allocation. USS plans to invest five per cent of its asset allocation in individual hedge funds over the next 18 months to two years. The fund has undertaken to increase its investment in alternative strategies to 20 per cent in the medium term.