The $4.6 billion industry fund Auscoal Super has appointed a $50 million mandate with Pengana Capital.

The coal-mining industry super fund invested the $50 million into the Pengana Global Volatility fund.

According to Pengana, the placement follows months of extensive due diligence by the Auscoal investment team working closely with the Sydney-based fund manager.

The volatility fund is managed by US-based volatility expert Al Wilkinson, who is well known as the founder of the Volatility - or VIX - Index.

"After extensive due diligence Auscoal Super chose to invest in the Pengana Global Volatility Fund for a number of reasons", says Bruce Watson, chief executive of Auscoal Super .

"We look for highly skilled investment managers and this investment backs the experience and expertise of Al Wilkinson, who runs the fund out of the US.

"In addition, the Pengana Global Volatility Fund, in particular, has a very low correlation to other asset classes and finally, the investment increases the Fund's alternative assets portfolio which provides additional diversification. This will help the fund achieve its goal of minimising the downside," he said.

The Pengana Global Volatility strategy now has in excess of $600 million in funds under management.