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No Contract Deal for CalPERS, FRM

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SACRAMENTO, Calif. (–Unable to come to terms on a contract, the California Public Employees’ Retirement System and London-based fund of funds Financial Risk Management Ltd. have parted ways.

CalPERS, with US$161 billion in assets, last year had said it wanted to partner with FRM and two other funds of funds firms to implement a US$1 billion hedge fund investment strategy. FRM and the two firms, Pacific Alternative Asset Management Co., Irvine, Calif., and UBS O’Connor LLC, Chicago, were to have been part of a hedge fund advisory “pool” that would give CalPERS ready access to hedge funds.

CalPERS decided to work with those three advisers after a contract with Blackstone Alternative Asset Management, New York, expired Previous HedgeWorld Story.

Brad Pacheco, a CalPERS spokesman, said all three firms were to be hired, contingent upon working out terms and conditions of the contracts. FRM and CalPERS officials were never able to work out terms suitable to both sides.

“We use UBS and we use PAAMCO, but because we didn’t come to an agreement with FRM, the talks stopped and we both went our separate ways,” Mr. Pacheco said.

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