US/ UK - The Massachusetts state pension system reportedly lost US$30m following the collapse of hedge fund Sowood Capital Management LP last month.
The state pension system is believed to have lost the money through funds allocated to fund of hedge funds manager, Arden Asset Management.
Massachusetts Pension Reserves Investment Management Board executive director, Michael Travaglini, reportedly said: “The autopsy on Sowood won’t be complete for some time but obviously we will be working with Arden to determine what if anything we should change about our existing program going forward.”
The state pension fund is said to have allocated £456m to Arden in July 2004, according to newspaper reports.
In a related development, West Yorkshire Pension Fund (WYPF) allocated five managers to invest £260m making up 5% of its total investment portfolio, in a fund of hedge funds over three to four years from 2005. Arden was one of these funds.
A spokesman from WYPF could not confirm it had lost money in the Sowood collapse.
Sowood’s investment in corporate bonds and related securities were reportedly weakened by the recent failure in the sub-prime market.
No one from Arden was available for comment.
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