Sterling Heights (Mich.) General Employees' Retirement System is conducting a shortlist search for a hedge-fund-of-funds manager, and is also planning a shortlist search for a real estate manager; each will run $4 million, said Rick Sanborn, pension administrator. The $88 million pension plan is making the moves following an asset allocation study; funding will come from reducing a $35 million Lehman Aggregate index fund run by State Street Global Advisors, he said.
Finalists for the fund-of-funds search will be interviewed within 90 days, and when that manager is hired, the real estate manager search will commence, Mr. Sanborn said. No timeframe has been established for the first hire. Trustees have not decided whether to invest in REITs or real estate pools, and the real estate search will likely take longer than three months, he said.
The plan's asset allocation is 45% domestic equity, 30% domestic fixed income, 15% international equity, 5% hedge funds and 5% real estate. Merrill Lynch is assisting.