PERAC Ups Hedge Fund Mandate Size For Mass. Pensions

Aug 16 2007 | 11:59am ET

The Public Employee Retirement Administration Commission, the oversight committee of the Massachusetts Public Pension Systems, has voted to allow all systems to invest up to 10% in hedge funds and absolute return strategies without its approval. The policy includes a proviso that any amount in excess of 5% is invested through the Pension Reserves Investment Trust Absolute Return Segment.

The commission said its recent decision reflected its willingness to continue to “level the playing field” for local systems relative to PRIT (which has a total of 10% allocated to hedge funds through a combination of its basic absolute return and “portable alpha” investments) as well as its recognition that investing in hedge funds through established, well-diversified funds of funds has so far been successful in achieving favorable positive returns with minimal exposure to any single hedge fund.

The move is unlikely to make the Massachusetts Secretary of the Commonwealth especially happy. William Galvin has railed against public pension funds investing in hedge funds, and is currently suing activist hedge fund manager Bulldog Investors. He has also demanded that collapsed Boston hedge fund Sowood Capital Management—which took $30 million in Massachusetts pension money down with it—explain its sudden losses.

At its regular meeting on July 25, the commission also voted to approve a request from the Andover Retirement Board to increase its allocation to the absolute return segment to 10% from the previous limit of 7.5%.


In Depth

FINtech Focus: Fundbase Aims To Revolutionize Access To Hedge Funds

Jan 23 2015 | 11:03am ET

Global investment in financial technology—also known as fintech—is booming....

Lifestyle

Looking For A Hedge Fund Manager? Try Davos

Jan 28 2015 | 8:48am ET

Davos, Switzerland seems to have become the hedge fund capital of the world—at...

Guest Contributor

From Switzerland With Love: Some Hard Truths About Central Banks And Risk

Jan 23 2015 | 7:54am ET

In the wake of the Swiss National Bank uncoupling the country’s currency from...

 

Editor's Note