Fri, Jul 25, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Two U.S. retirement funds to allocate $330m to L/S equity hedge funds

Thursday, February 18, 2010
Opalesque Industry Update – Two American retirement systems have announced plans to allocate a total of $330m to long/short equity hedge funds, reported PIonline.com.

The San Bernardino Country (California) Employees’ Retirement Association is looking for a long/short equity hedge fund manager for its first-ever $150m allocation into hedge funds, the first report said.

Investment officer Don Pierce said that the $5bn retirement system has tasked its investment consultant NEPC to search for a manager. The new allocation is part of the system’s overall move to active equity management.

And the Milwaukee County Employees’ Retirement System appointed K2 Advisors and ABS Investment Management to manage its long/short equity funds of hedge funds, another report indicated. Retirement system manager Gerald Schroeder said each manager would be given $90m each or 10% of the system’s assets.

It is also the first foray of the $1.8bn fund into hedge fund investment.

Schroeder said the fund would come from rebalancing from overweight asset classes such as fixed income, which was at 44.1% of total assets as of Dec. 31, and domestic equity, 30.9% as of the same date.

The surge in hedge funds allocations by institutional investors was predicted by industry tracker Preqin in its December 2009 report, which said that hedge fund managers could rely on institutional investors when seeking new capital this year.

Preqin’s latest report in January, which surveyed 60 institutional investors, showed that the number of institutions investing in hedge funds through separate or managed accounts could more than double in 2010. At least 16% of those surveyed said they already invested in hedge fund separate accounts and an additional 23% are considering making their first separate account investment in 2010.

Only this week, it was reported that Persian Gulf Arab investment institutions were expected to shore up allocations to hedge funds in the coming months as InvestCorp Bank BSC of Bahrain, which manages $12bn, has signified intentions to raise its hedge fund portfolio.

Australia’s Future Fund also announced early this month that it allocated some $4.2bn to three hedge fund managers; Ochs Ziff, a US-based multi-strategy manager, BlackRock Alternative Advisors, which has various hedge fund strategies managed from several countries including the former Quellos Capital Management, and Brevan Howard, a UK-based alternatives manager.

Although institutional investors are now more willing to invest in hedge funds, they are also demanding more transparency and control over their portfolio. The $200bn California Public Employees’ Retirement System (Calpers), one of the largest and best-known institutional investors, wants more control over the hedge funds it uses. Calpers said it will no longer allow to pool money with other investors in the conventional fund scheme. It also wants these managers to trade directly for Calpers’ individual accounts, an arrangement that would allow the pension fund to see and control all the securities the manager picks on its behalf. – KM –

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing
  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Events – AIMA Australian Hedge Fund Forum, Sept. 16, Sydney[more]

    AIMA Australia invite you to join us at our annual Hedge Fund Forum on Tuesday 16th September 2014 at the Sofitel Sydney Wentworth. The AIMA Australian Hedge Fund Forum is a non-profit hedge fund conference organised by the industry for the industry, featuring quality Australian and internation

  2. Opalesque Roundtable: Success in hedge fund marketing not linked to performance, but investor appetite[more]

    Komfie Manalo, Opalesque Asia: Success in marketing a fund is not linked to the performance, but to investor appetite, to the way you can market the fund, and to how much time you can spend to raise assets, said Antoine Rolland, the CEO of incubator and seeding firm

  3. Opalesque Exclusive: Loeb, Grantham cite growing economic concerns in letters[more]

    Bailey McCann, Opalesque New York: Hedge fund manager Daniel Loeb, head of Third Point, and Jeremy Grantham of Grantham, Mayo, Van Otterloo & Co. have both released their quarterly investor letters today. While news is positive on some fronts, and both men see pockets of opportunity, they also h

  4. Investing – Hedge funds expect Netflix earnings to catapult forward, Third Point's Loeb takes stakes in Fibra Uno, YPF, Royal DSM, Lake Capital in talks to back Engine Group[more]

    Hedge funds expect Netflix earnings to catapult forward From Investing.com: Netflix has made major strides forward in 2014 despite ongoing battles with the FCC and cable companies over the issue of net neutrality. The FCC has now received over 500,000 comments from the public on its pend

  5. Opalesque Roundtable: European family offices struggle to retain their investments in offshore hedge funds[more]

    Komfie Manalo, Opalesque Asia: The European Union’s Alternative Investment Fund Managers Directive (AIFMD) will constrain investment opportunities amidst concern a number of U.S. fund managers will stop marketing their products in the European Union under the new rule, said Valentin Bohländer fro