Texas County Pension Boosts Hedge Fund Investments

Jul 13 2011 | 10:13am ET

A major Texas pension fund has poured more than $1 billion into more than two dozen hedge funds.

The Texas County & District Retirement System in March boosted its absolute return target from 15% to 20%, and wasted no time in spending that increase. The $18.2 billion public pension increased its allocations to 19 managers in its absolute return portfolio, HFMWeek reports, handing an additional $240 million to six long/short equity managers, $220 million to five multi-strategy managers, $140 million to two global macro managers, $120 million to three credit managers, $60 million to two event-driven managers and $30 million to a distressed investments manager.

But that wasn't all: TCDRS also added $170 million in new allocations to its separate distressed debt portfolio, hiring Avenue Capital Group, Davidson Kempner Capital Management, Sankaty Advisors and Victory Park Capital to manage $30 million each, and Oaktree Capital Management to manage $50 million.

TCDRS also added another $50 million to its investment with MKP Capital Management, putting $50 million from its opportunistic credit portfolio into the firm's Structured Credit Strategies. In December, the pension added $15 million to its then-$75 million investment in MKP's Credit fund.

The moves bring TCDRS' total hedge fund allocation up to 18.9%, or some $3.4 billion.


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