Michigan Boosts Hedge Funds, Cuts Private Equity

Sep 7 2010 | 8:25am ET

The Michigan State Retirement Systems is tripling its hedge fund allocation—at the expense of its private equity investments.

The $45 billion public pension fund has boosted its hedge fund allocation from 2% to 6%, Pensions & Investments reports. The hedge fund increase, as well as that of real return and opportunistic funds from 1% to 4%, will be funded by a sizeable cut in its private equity allocation from 20% to 14%. The reduction in p.e. investments will be undertaken gradually.

The increased hedge fund allocation will begin to take effect in October, the beginning of the Michigan Systems’ fiscal year. But the pension already invested an additional $203 million with Aetos Capital in June; Aetos runs a customized fund of hedge funds portfolio for the systems.

“Private equity has done well for the funds, but with increasing liquidity needs over the next several years, the change will reduce illiquid asset holdings,” Terry Stanton, a spokesman for the Michigan Department of Treasury, told P&I.


In Depth

Q&A: Sancus Capital And The Disruption Of The CLO Market

Oct 5 2017 | 6:28pm ET

Traditional collateralized loan obligation (CLO) funds in the U.S. market can offer...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Finding Success as Alternatives Converge

Oct 9 2017 | 4:00pm ET

Rising interest among institutional investors over the past several years has led...