US - The US$220bn California Public Employees' Retirement System (CalPERS) is considering its first direct investment in international hedge funds, Global Pensions can exclusively reveal.
Clark McKinley, information officer, said the fund planned to increase investments to its Risk Managed Absolute Return Strategies(RMARS) programme from US$3.6bn to $4bn by year-end, and “potentially make direct investments in international hedge funds, rather than through funds of funds, as staff gain resources and expertise.”
The fund’s current international hedge fund exposure is through four international fund of funds (FOF) – Ermitage European FOF, KBC Asian FOF, SPARX FOF, and Vision Asian FOF.
McKinley stressed that the fund had “nothing to report” at present regarding direct investment, and added that staff would report it to the CalPERS board “if and when” a decision was made.
Asked whether CalPERS had made any new hedge fund appointments in its bid to increase its capabilities in this area, McKinley said: “This programme has only been under way for four years, and as with all of our programmes, there is never any rush into new ventures. As a long-term investor, we can take a measured approach, which we’re doing with the hedge funds. I can’t elaborate on potential staff changes, although none have been reported to our governing board.”
Hedge funds have come under renewed scrutiny following the implosion of Amaranth Advisors in mid-September.
Yet despite the bad publicity, institutional demand for hedge funds continues to skyrocket. According to the Bank of New York, institutional demand for hedge funds is set to triple to over US$1trn by 2010, largely led by pension funds seeking new asset classes to better match their growing liabilities.
In other CalPERS news, George Diehr, Rob Feckner and Priya Mathur have all been reelected to the fund's administration board.
Feckner currently serves as CalPERS board president, Diehr as chair of the Health Benefits Committee whilwe Mathur serves on the benefit program and administration, health benefits, and investment committees.
The People's Pension, Atlas Master Trust and The Cheviot Trust have been granted authorisation from The Pensions Regulator (TPR), taking the total number of authorised master trusts to 18.
Pension schemes have been warned they may now face a more challenging legal test if they wish to fix drafting errors.
The Greene King Pension Scheme has appointed XPS Pensions as its actuarial and investment adviser following a competitive tender process.
Professional Pensions has compiled a list charting the progress of master trust authorisation. View our list in full here...