Knoxville (Tenn.) City Employees' Pension Fund might add a hedge fund of funds to its asset allocation, but first it would have to modify its investment policy, said Mike Cherry, executive director. Dan Holmes, managing director with consultant Summit Strategies, met with plan officials this week for an educational session about alternative investments, and a hedge fund of funds was an investment style Mr. Holmes recommended. Officials of the $468 million fund are discussing investing at least 5% of total assets in a hedge fund of funds, said Mr. Cherry, noting that officials are considering several other types of alternative investments as well.
Summit Strategies is reviewing the fund's investment policy and recommending proposed changes; the current policy does not allow for hedge fund investments. Mr. Cherry said the board will submit proposed investment policy changes to the city council "probably sooner than later," but there is no specific timetable.