Lucent Asset Management Corp. is believed to be reviewing finalists to manage $100 million in hedge funds of funds as part of a portable alpha strategy, according to sources who insisted on anonymity. LAMCO manages $34 billion in retirement plan assets for its parent, Lucent Technologies Inc. Both are headquartered in Murray Hill, N.J.
Sources said Lucent invited more than a dozen hedge fund-of-fund managers to bid on a $1 billion portable alpha portfolio this spring, but the search was put on hold midyear. LAMCO continued with the search this autumn, sources said, but changed the parameters. The mandate was reduced to $100 million with new requirements: more transparency regarding underlying hedge fund managers; more education and meetings between hedge fund-of-funds staffers and LAMCO staff; and the provision that staff would be able to tag along on due diligence meetings. Sources said 10 to 12 of the original group were asked to update their proposals, and three to five semifinalists were invited to make presentations to the investment committee. Sources said the firm is now performing due diligence on two finalists.
Joan Campion, a LAMCO spokeswoman, said: "We continue to manage our pension funds prudently to yield the best return without taking inappropriate risks relative to the market. As part of the management of these funds, we continually examine various ways to invest our pension assets in accordance with the investment strategy set by Lucent's board of directors." She declined to confirm that LAMCO was conducting a hedge fund search or to provide any other information.
Jean Grisi, whom sources said co-heads the hedge fund effort at LAMCO, did not return phone calls seeking comment. Brad Wakeman, whom sources said co-heads the effort, declined to comment.
LAMCO is temporarily without a chief investment officer since Collette D. Chilton left in September to become the first CIO of the $1.5 billion endowment of Williams College, Williamstown, Mass. Calls made to Ms. Chilton were not returned.