Texas Permanent Terminates K2 As Hedge Fund Changes Begin

Jul 31 2012 | 10:55am ET

The Texas Permanent School Fund took its first steps towards shifting from funds of hedge funds to strategic partnerships and saving itself tens of millions of dollars in fees.

The $24.4 billion endowment fired K2 Advisors on July 20, effective immediately. K2 had been on watch since last year, and in November the fund said it would move to reallocate its $2.5 billion hedge fund portfolio from funds of funds to strategic partnerships with some of the funds of funds it currently invests with.

K2 managed nearly $400 million for Texas Permanent; that money will be reallocated to Blackstone Alternative Asset Management and Grosvenor Capital Management, Pensions & Investment reports. Texas Permanent did not explain why K2 received the chop, although it was put on watch last January for underperforming its benchmark for three straight quarters.

More changes could still be coming to the Texas endowment. Its investment staff is currently negotiating with its remaining funds of funds, which also include GAM USA and Mesirow Advanced Strategies, to lower fees and to hammer out new contracts, none of which can exceed two years. Those changes are expected to be approved by the state's Board of Education in November.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this fight. The Citadel...

Guest Contributor

Top 5 Predicted Outcomes Of CalPERS' Hedge Fund Divestment

Sep 22 2014 | 8:35am ET

CalPERS’ announcement to divest of hedge funds has created a significant buzz...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.