The $420 million New Orleans Employees Retirement System has increased its hedge fund allocation to 15% from 10%, according to Chairman Jerry Davis.
However, Davis said the system is in no hurry to make any decisions. “We don’t have a desperate search underway because we’ve been looking for the better part of a year for a complementary strategy to our current three funds of funds,” he said. “We also have about 18 individual funds and some of them have made significant money for us, so part of the reason for increasing the allocation was the recognition that we were already over our 10%. So the 15% does give us flexibility to add more, and we will, but it’s not something that we will be doing willy-nilly.”
Davis added that the system is “a little exhausted at the moment” because it just finished a large-cap growth search and hire and is currently deciding on whether it wants to hire a new large-cap value manager, which will be the agenda for its January meeting. “By February we’ll be taking a hard look at our hedge fund situation,” he said.
The system does not issue formal RFPs, according to Davis, who said managers should send what they have for it to review with its consultants at Morgan Stanley.
New Orleans is currently invested in funds of funds K2 Advisors, Silver Creek Capital Management and Meridian Capital Partners, which share some $12 million in allocations.