New Orleans City Employees Retirement System is working with consultant Morgan Stanley to compile a shortlist of alternatives managers, said Jerry Davis, board chairman. The $400 million pension fund will allocate about $11 million to alternative investments, which could include hedge funds or distressed debt managers. Funding will come from terminating an existing manager; Mr. Davis declined to provide any information about the termination because the firm has not yet been informed. Fund officials hope to have new managers in place by April 1.
The system currently invests about 7% of its assets in alternatives. The target is 10%, which could soon be increased to 15%, Mr. Davis said.