MassPRIM Seeks Savings From Hedge, Private-Equity Funds

Oct 22 2013 | 9:46am ET

Massachusetts' main public pension manager is set to make a number of changes to its alternative investments portfolio in an effort to save money.

The $53.9 billion Massachusetts Pension Reserves Investment Management Board is set to begin phase one of its Project SAVE, Pensions & Investments reports. And that's bad news for funds of hedge funds, whose share of the system's assets will be cut in favor of direct hedge-fund investments. MassPRIM estimates that the move will save it $40 million.

The pension is also taking advantage of contract renegotiations with some of its hedge fund managers, hoping to squeeze some fee savings out of them. And it plans to begin a private-equity co-investment program which would see it pay no fees at all.

MassPRIM is also investigating hedge-fund replication strategies.

Phase two of the project could see Massachusetts move money out of hedge funds and into passive and internally-managed strategies, according to P&I.

In addition to Project SAVE, the MassPRIM board on Friday also approved an additional $100 million investment in Cantab Capital Partners' Core Macro Fund.

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