Sterling Heights (Mich.) General Employees' Retirement System selected J.P. Morgan Fleming to manage $4.5 million in its first hedge fund of funds, pending contract negotiations and trustee approval, said Rick Sanborn, pension administrator. The $90 million system will fund the new portfolio by reducing a $38 million Lehman Aggregate index fund run by State Street Global Advisors, Mr. Sanborn said. Goldman Sachs and Tremont were the other finalists in the search, he said.
Separately, trustees named INVESCO and Heitman as finalists in the plan's search for a manager to run $4.5 million in its first REIT portfolio, Mr. Sanborn said. Interviews are scheduled at the board's Oct. 23 meeting; a selection might be made that day, he said, although trustees might interview additional firms. Funding will also come from reducing the SSgA bond index fund, he said.
The plan's asset allocation is 60% equity, 30% fixed income, and 5% each in hedge funds of funds and real estate. Merrill Lynch is assisting.