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Massachusetts goes it alone on hedge funds
By Martin | October 17, 2011
State pension fund puts $280 mln with 11 managers
* Most managers get $25 million allocation
* More managers expected to be hired in December
BOSTON, Oct 11 (Reuters) – Massachusetts, which has long bet big on hedge funds, hired 11 managers on Tuesday as part of the state’s push into direct investments with these types of portfolios.
Trustees for the roughly $46 billion state pension fund voted on Tuesday to send $280 million into some of the world’s biggest and best-known hedge funds.
A year ago, the pension fund agreed to stop using so-called funds of funds to select hedge funds and thereby save on fees. The state’s treasurer, Steven Grossman, said that state prefers to have a direct relationship.
Now the fund unveiled the first managers in its direct hedge fund investment program.
Massachusetts sent $25 million to each of the following fund firms: Anchorage Capital Group, Arrowgrass Capital Partners, BlueCrest Capital Management, Brevan Howard Capital Management, Claren Road Asset Management, Elliott Management, Kingdon Capital Management, Och-Ziff Capital Management Group , Taconic Capital Advisors and York Capital Management. Viking Global Investors will receive $30 million.
The pension fund used consulting firm Cliffwater LLC to help find the hedge funds.
Another group of 10 managers is expected to be hired in December, executives at the pension fund said.
In the past, hedge funds have helped shore up the Massachusetts’ pension fund’s returns but this year many hedge funds are experiencing though times amid concerns about Europe’s debt crisis, the stalled U.S.economy with its stubbornly high unemployment rate, and concerns over upcoming elections around the world in the next year.
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