Close Close

Portfolio > Alternative Investments > Hedge Funds

CalPERS Increases Hedge Fund Allocation

Your article was successfully shared with the contacts you provided.

SACRAMENTO, Calif. (–Trustees of the California Public Employees’ Retirement System decided to move forward with an annual plan to increase the absolute return allocation to 2% to 4% of the US$138 billion pension fund, although it has yet to complete its initial 1% allocation to hedge funds.

Citing a U.S. economy that is slowly strengthening, CalPERS officials told trustees in their annual plan that no noticeable recovery is expected until 2004 and that only single-digit equity returns are anticipated for the foreseeable future. The current investment climate should favor “alpha” or “active return” strategies.

So far, the fund has authorized US$690 million to absolute return strategies including: 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 fund announced plans to reorganize its strategy earlier this year, creating a “spring-fed pool” of advisers to assist the US$138 billion pension fund in managing its hedge fund program, which will be called an absolute return strategies program .

Spokesman for the fund Brad Pacheco said that officials plan to implement the increased allocation over the course of the next year and beyond to get up to the final 2% to 4% allocation. The allocations, approved by the board on Monday, fall under the pension fund’s global equity allocation. For now the search for additional managers continues.

[email protected]


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.