UPDATE 1-UK university scheme backs computer-driven hedge funds

* Brings forward investments into short-term CTAs

* Concerned about market volatility

* Hedge fund investments returning annualised 12-13 pct

(Adds quotes, detail)

By Laurence Fletcher

MONACO, June 16 (Reuters) - Britain's 30 billion pound ($44.47 billion) universities pension fund, USS, has begun investing in short-term, computer-driven hedge funds in an effort to achieve growth in turbulent markets, its head of alternative investments said.

"We've accelerated our short-term CTA (commodity trading advisers) programme. We have continued concerns about the market environment," Mike Powell said in an interview on the sidelines of the GAIM hedge fund conference in Monaco.

"We're doing the first short-term CTA as we speak," he added.

Short-term CTAs are computer-driven funds that try to make money out of volatile markets by betting on short-lived market moves. They tend to perform better than many other hedge funds in choppy markets such as those seen in May.

The Universities Superannuation Scheme (USS) has been at the forefront of pension fund moves into the hedge fund sector and plans to commit up to 2 billion pounds over five years.

Powell said USS, which began investing in hedge funds last year, has seen annualised returns of 12-13 percent from the eight funds it has so far backed, which is above USS's targets.

"It's been pretty good... We've had a good tailwind, although we had a bit of a blip in May," he said. "We're above target returns and above the industry benchmarks."

He said USS had so far invested around 600 million pounds in a range of hedge funds including global macro, long-short credit and directional long-short portfolios. It expects to invest with around 30 managers in total. (To read the Reuters Funds Blog click on blogs.reuters.com/fundshub; for the Global Investing Blog click here) ($1=.6746 Pound) (Editing by Louise Heavens)