Institutional investors are adopting and adding to market-neutral strategies, despite last year’s disappointing returns.
Sources said the $35 billion Virginia Retirement System, Richmond, might add up to $1 billion in portable alpha strategies, including market-neutral approaches, on top of the nearly $2 billion the fund has invested in the area.
Also, searches are under way at the $4 billion Northeast Utilities Service Co. pension fund, Hartford, Conn.; the $1.9 billion Armstrong World Industries fund, Lancaster, Pa.; and the $1.8 billion Massachusetts Bay Transportation Authority Retirement Fund, Boston. Officials from those funds declined or were unavailable to comment.
Officials at the $15 billion pension fund of U S WEST Inc., Englewood, Colo.; $5.6 billion pension fund of International Paper Co., Purchase, N.Y.; and the $3.2 billion endowment fund of the University of Chicago said they will study investing in market-neutral strategies.
The Southern Co. pension fund, Atlanta, hired First Quadrant, INVESCO, MDT Advisers and Salus Capital Management to manage a total of $100 million; and General Motors’ officials are believed to be adding three additional market-neutral managers, reallocating some of its $450 million in assets the fund already has with three existing market-neutral firms.
