Pennsylvania State Employees' Retirement System, Harrisburg, hired hedge funds-of-funds manager Arden Asset Management to run $150 million in a custom, event-driven equity investment, confirmed spokeswoman Pamela Hile.
The hire, part of the $25 billion pension fund's new diversifying assets portfolio, is funded by about $100 million held by Arden in a legacy absolute-return portfolio and $50 million in cash.
The pension fund originally hired Arden in July 2006 to run $650 million in low-volatility, non-directional hedge funds as part of its now-defunct portable-alpha program.
The pension fund's five-year interim target for the diversifying assets portfolio is 12% and is meant to consist of “fund-of-one mandates” run by hedge funds-of-funds managers that offer customized separate accounts.
Separately, the pension fund announced an estimated return of 12% for the year ended Dec. 31.