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February 19, 2003 at 07:00 PM
SACRAMENTO, Calif.(HedgeWorld.com)–The US$1 billion commitment to hedge funds by the largest U.S. pension plan might be undergoing some changes following its trustees June meeting.
The California Public Employees’ Retirement System plans to create a “spring-fed pool” of advisers to assist the US$134 billion pension fund in managing its hedge fund program, which will be called an absolute return strategies program. At the investment committee’s June meeting, staff will recommend an additional allocation to hedge funds, according to board meeting documents posted on the pension fund’s web site.
Blackstone Alternative Asset Management, which was hired last May as the fund’s strategic partner, will be included in the pool of advisers (Previous HedgeWorld Story). BAAM’s contract expires June 30. Officials also are expected to hire State Street International Fund Services portfolio management system to provide increased portfolio transparency and risk analysis for the absolute return strategies program.
So far, CalPERS has allocated more than half of its initial US$1 billion that was slated for hedge funds in November 2000 (Previous HedgeWorld Story). So far, US$555 million has been invested in various hedge funds strategies. Those investments are: Andor Technology Fund (US$50 million); Apex-Zaxis Partners LP (US$40 million); Atticus Global LP (US$40 million); Brookside Capital LP (US$75 million); EVA-Pentangle (US$40 million); Farallon Offshore (US$50 million); Landsdowne European Ltd. (US$25 million); Liberty Square Offshore (US$40 million); Tosca (US$50 million); Matador Capital Management (US$25 million); Tremblant Partners (US$35 million); Welch Entrepreneurial (US$25 million); and Symphony (US$50 million).
The latest allocations to hedge funds were made in December and January totaling US$95 million. A total of US$25 million each went to Matador’s Everglades Partners LP; the Lansdowne European Strategic Equity Fund LP; and Brookside Capital LP. Follow-on investments of US$10 million each were made in Tremblant Partners and in Symphony’s Rhapsody program.
From April 2002 through year-end, the program posted a 2.4% return gross of fees, as compared with its benchmark (50% Wilshire 2500 index and 50% U.S. one-year Treasuries) that had a return of negative 7.7%.
