SEARCHES AND HIRES

Ohio PERS taps Aberdeen for $850 million emerging markets debt allocation

Retirement system also commits to private equity, invests in hedge funds

Ohio Public Employees Retirement System, Columbus, hired Aberdeen Asset Management to run about $850 million in active emerging markets debt, according to Wednesday’s board meeting notes provided by spokesman Michael Pramik.

It is the second emerging markets debt hire by the retirement system, which includes $75 billion in defined benefit plan assets, in as many months. The hires come as a result of an increase in its emerging markets debt target to 6% from 4%.

The retirement system hired BlueBay Asset Management in March, for a similar-sized portfolio.

Funding for the emerging markets debt increase comes from reductions in the targets to domestic high-yield fixed income to 3% from 4.5% and global high-yield fixed income to 1% from 1.5%. No managers were terminated.

Separately, the retirement system committed $225 million to Strategic Partners VI, a secondary private equity fund that focuses on buyout, mezzanine and distressed debt funds. The retirement system has committed to previous Strategic Partners funds.

Also, the retirement system committed $82 million to HgCapital Co-Invest 2, a corporate finance buyout co-investment. The retirement system previously committed $200 million to HgCapital 7 in May 2013.

The retirement system also made a total of $410 million in additional direct investments in seven hedge funds:

  • $125 million in JANA Nirvana Fund, a value-oriented, event-driven hedge fund managed by JANA Partners, bringing the retirement system’s total investment to $225 million;
  • $75 million in Chatham Asset Partners High Yield Fund, a credit long/short hedge fund managed by Chatham Asset Management, bringing the total investment to $125 million;
  • $75 million in OZ Domestic Partners II, managed by Och-Ziff Capital Management Group, bringing the total investment to $125 million;
  • $50 million in Discovery Global Macro Partnership, a discretionary global macro hedge fund managed by Discovery Capital Management, bringing the total investment to $200 million;
  • $40 million in Highline Capital Partners QP, a long/short equity hedge fund, bringing the total investment to $140 million;
  • $25 million in BHR Master Fund, an opportunistic, value-oriented, event-driven hedge fund managed by BHR Capital, bringing the total investment to $125 million; and
  • $20 million in Lakewood Capital Partners, an opportunistic, value-oriented, long/short equity hedge fund managed by Lakewood Capital Management, bringing the total investment to $45 million.