Oklahoma Police Pension & Retirement System, Oklahoma City, is moving a combined $31 million from two hedge fund-of-funds portfolios to direct investments in four of the portfolios’ hedge fund managers, said Steven Snyder, executive director and chief investment officer.
The move will be the first direct hedge fund investments by the $1.85 billion pension fund.
The four hedge funds are long/short strategies managed by AKO Capital and Tremblant Capital Group, and activist hedge funds managed by Trian Partners and Cevian Capital.
The four managers are part of Grosvenor Capital Management’s $175 million and Attalus Capital’s roughly $80 million hedge fund-of-funds portfolios for the pension fund.
The pension fund ultimately wants Grosvenor Capital to manage about $150 million in its “Class A” fund of funds, while eight to 12 direct hedge fund managers run a total of $100 million in the “Class B” fund. Grosvenor will conduct only the back-office work and due diligence for the Class B investments.
The board will have final approval on all direct investments. Investment consultant Asset Consulting Group will assist Grosvenor.
Mr. Snyder said $20 million has already been redeemed from Attalus Capital’s portfolio, which was approved by the board when Attalus was terminated in May, with another $60 million remaining, which will continue to be redeemed over the next six to 12 months.
The four direct hedge funds were overlapping in the portfolios of both Attalus and Grosvenor, Mr. Snyder said. The pension fund will save more than $1 million a year in fees with the move, he added.