OKLAHOMA CITY — The Oklahoma Police Pension and Retirement System is considering investing $10 million in a small-market buyout fund, confirmed Bob Wallace, executive director of the $1.6 billion pension plan. The move would be made for diversification, and funding would come from cash, Mr. Wallace said. There are no plans to issue an RFP, he said. Asset Consulting Group is assisting.
ALTERNATIVES: Oklahoma Police consider small-market buyout fund
SANTA FE, N.M. — The New Mexico Public Employees Retirement Association amended its investment policy and guidelines at its Sept. 28 meeting to include allocations of 5% each to hedge funds and private equity. Funding for hedge funds will come from the $3.5 billion fixed-income portfolio, and the private equity allocation will come from the $6.9 billion equity portfolio. Specific manager reductions haven't been determined.
In August, the board had amended its investment policy and guidelines to include allocations of 2.5% each to tangible assets and 2.5% allocation to real estate. One-fifth of the hedge fund allocation will be invested in hedge funds of funds; all other alternative investments will be in direct funds, said Robert Gish, chief investment officer of the $11.9 billion association.
WASHINGTON — Senate Finance Committee Chairman Charles Grassley, R-Iowa, asked the heads of federal organizations with finance and pension fund jurisdiction whether their agencies "could require more transparency" about hedge funds, according to Mr. Grassley's website. Mr. Grassley also asked agency chiefs for their ideas about how Congress could improve hedge fund transparency.
"I am deeply concerned about the lack of publicly available information regarding hedge funds, and am writing to ask for your assistance in identifying the scope of this problem and appropriate ways to remedy it," Mr. Grassley wrote in a letter to Treasury Secretary Henry Paulson; Labor Secretary Elaine Chao; SEC Chairman Christopher Cox; CFTC Chairman Reuben Jeffery III; and Vincent K. Snowbarger, interim PBGC director.
Mr. Grassley wrote that he was worried about the impact on public and private pension plans in light of the recent collapse of hedge fund manager Amaranth Advisors. He asked his staff to find out which major public and private pension funds were invested in Amaranth and other energy-focused hedge funds and wrote that "this information was not available either through public records or even through the various federal agencies that oversee our financial and energy markets. Not only was this information not publicly available, it also was impossible to even determine the identity of the largest energy-focused hedge funds."
MINNEAPOLIS — Cargill and its alternative investment management subsidiary, Black River Asset Management, announced that on Jan. 1, the hedge fund service and administration unit will be spun off into an independent company, LaCrosse Global Fund Services.
Black River Asset Management and Cargill's proprietary capital markets trading will continue to be handled by LaCrosse, according to a statement from Cargill.
About 150 employees are moving to the new company, which will be based in New York. Stuart Feffer and Christopher Kundro are co-CEOs of LaCrosse. Previously, the two were both managing directors and co-heads of the wealth and investment management practice at BearingPoint. Betsy Palmer, BearingPoint vice president of global corporate communications, was unable to provide further information by press time.
CHICAGO — Hedge fund of fund assets under management were $500 billion as of Sept. 30, up 17% from June 30, according to new data from Hedge Fund Research. The growth was due to new inflows. Fund-of-funds assets were up 27% from Dec. 31.
Growth in hedge fund assets was much slower in the third quarter, up 4% to $1.34 trillion as of Sept. 30. Hedge fund growth for the nine months was 24%.
Major hedge fund indexes landed in positive territory for the nine months ended Sept. 30, although none beat the 8.5% return of the S&P 500 or the 11.2% return of the MSCI World Equity indexes. The best return was 7.1% for the Hedge Fund Research Hedge Fund Composite index. Next was 6.71% of the Barclay Hedge Fund index, followed by 6.6% for the Greenwich/Van Hedge Fund index; 6.32% for the Hennessee Hedge Fund index; 6.19% for the Eurekahedge Hedge Fund index; and 5.8% for the MSCI Hedge Fund Composite index.
Among major investible hedge fund indexes, the RBC Hedge 250 index returned 5.69% through Sept. 30. It was followed by Greenwich/Van Hedge Fund Investable index, 5.5%; Credit Suisse/Tremont Investable Hedge Fund index, 5.3%; and MSCI Hedge Invest index, 3.29%.
Hedge fund-of-funds index returns trended lower than indexes based on single and multistrategy hedge funds. The EDHEC Fund of Funds index topped the pack with a 5.7% return for the nine months, followed by the HFRI Fund of Funds index, 4.77%; Barclay Hedge Fund of Funds, 4.26%; and Eurekahedge Fund of Funds, 4.02%.
Eurekahedge also calculated nine-month index returns for hedge fund managers by size and reported that hedge funds with assets of more than $500 million returned 6.57%, followed by midsize funds (with $100 million to $500 million) at 6.18%, while small funds (with less than $100 million under management) came in at 6.13%.
NEW YORK — Venture capital and buyout fundraising slowed in the third quarter, according to Thomson Financial and National Venture Capital Association data. For the quarter, 52 venture capital funds raised $4.9 billion, compared with 62 funds raising $13.4 billion in the previous quarter, and 32 buyout and mezzanine funds raised $22.9 billion, down from 41 funds that raised $35.3 billion. A year ago, 62 venture capital funds raised $5.6 billion and 63 buyout and mezzanine funds raised $22.5 billion.
NEW YORK — Zurich Financial Services established a New York-based subsidiary, Zurich Alternative Asset Management, to handle the Swiss parent's insurance and corporate assets. ZAAM will manage single and multistrategy hedge funds, buyout funds, venture capital, private equity, mezzanine financing funds and U.S. real estate, said Ron Cacciola, chief investment officer of the new unit.
Four Zurich Financial employees transferred to leadership positions at ZAAM, according to a company statement. David Wasserman is ZAAM's CEO; he was Zurich's CIO until he was replaced by Martin Senn in January. Mr. Cacciola was Zurich's head of group investment management. Louis Rubino, ZAAM COO, and Chris Halabi, head of real estate, held similar positions on Zurich Financial's investment management team. Silvia Gaeumann, a spokeswoman for Zurich Financial, could not be reached by press time regarding replacements for Messrs. Cacciola, Rubino and Halabi.
James Kester heads private equity for ZAAM. He was co-CEO of Allianz Private Equity Partners and will not be replaced there, said Elliott Royce, managing director and co-head of APEP, who assumed Mr. Kester's duties.
David Tsung heads hedge fund manager selection and research. He was a partner at hedge fund-of-funds manager Alternative Investment Group. David K. Storrs, president and CEO of Alternative Investment Group, did not return a call seeking information about Mr. Tsung's replacement.
Madanda Machayya, head of hedge fund quantitative strategies, was CIO of Starview Capital Management. Garry Crowder, CEO of Lyra Capital, Starview's parent, did not return a call by press time seeking information about Mr. Machayya's replacement.