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.