English pension fund puts PAAMCO hire on hold

Merseyside Pension Fund, Liverpool, England, postponed hiring PAAMCO as a hedge fund consultant pending further due diligence, said Peter Wallach, head of the £4.6 billion ($7.4 billion) fund.

The fund’s board in June approved the hiring of Pacific Alternative Asset Management as consultant, but the move awaits the outcome of a staff review focused on an ownership dispute at the firm, and more recently, a probe by the SEC, Mr. Wallach said.

PAAMCO’s £25 million hedge fund-of-funds portfolio for the pension fund is not under review. “They are not on a watchlist,” Mr. Wallach said. About 5%, or £200 million, of Merseyside’s assets are in hedge funds of funds.

“The further due diligence being conducted by Merseyside has been scheduled for some time and is not directly connected with recent developments,” Stephen Oxley, managing director of PAAMCO in London, said in an e-mail response to questions. He declined further comment, citing company policy on not commenting on clients.