CalPERS Plans Multistrategy Seeding Program

Apr 22 2009 | 9:31am ET

One of the world’s largest hedge fund investors may be getting into the hedge fund seeding business.

Under its proposed “Sprout Program,” the California Public Employees’ Retirement System would serve as an incubator for emerging hedge fund managers, launching its own multistrategy hedge fund. Under CalPERS’ watchful eye, the “skilled, emerging hedge fund talent” participating in the program would manage the pension fund’s money for two to three years, with the best spinning out as independent firms, according to a report on the plan’s Web site. They would “become equity owners and operators of their own hedge funds,” CalPERS’ plan says. The new firms would be called “sprout offspring” by their proud parent.

Details of the multistrategy seeding platform have yet to be worked out.

The proposed move is part of CalPERS’ planned overhaul of its $5.9 billion in hedge fund investments, which also includes moving away from commingled funds and into separately-managed accounts. CalPERS, the largest public pension in the U.S., was to consider the plans at an investment committee meeting on Monday.


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