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: Star Mountain's Brett Hickey On Investing In 'The Growth Engine Of America'

Sep 22 2017 | 5:06pm ET

Lower middle-market companies form the economic fabric of the nation, but they can...

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

Don’t Overlook These 6 Hybrid Cloud Concerns

Sep 14 2017 | 6:27pm ET

Cloud-based technology solutions have made tremendous inroads into the alternative...

 

From the current issue of

With NFL season on the horizon, it’s time to take a look at our Fantasy Football value picks. Last year, we nailed it on Drew Brees, Jordan Howard, Frank Gore and Dwayne Allen. We missed pretty badly on Duke Johnson, Demaryius Thomas, Mohammed Sanu and Eli Manning.