New York Pensions Seek Up To 15 Hedge Funds

Dec 19 2012 | 10:26am ET

Three New York City pension funds are looking to event-driven hedge funds to help them reduce volatility in their portfolios.

The three pensions, which invest on behalf of the city's employees, police officers and firefighters, could invest in as many as 15 hedge funds, primarily event-driven strategies. Seema Hingorani, the head of public equities and hedge funds for New York City, said the three pensions have most of their hedge fund assets in global macro funds and commodity trading advisers, and it will consider some similar funds for the new allocations.

Long/short equity hedge funds will not be favored.

The three funds have about $70 billion between them. They have about $1.8 billion of their $3.5 billion hedge fund target left to spend, after investing in Permal Asset Management, BlueCrest Capital Management, Brevan Howard Asset Management, Brigade Capital Management, Caspian Capital Advisors and D.E. Shaw & Co. last year and early this year.

Most consideration for the allocations, which will range from $100 million to $350 million, will go to hedge funds with more than $1 billion in assets. Some attention will be paid to emerging managers. All potential mandate-winners will have to face three approval processes, one for each pension fund.

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