The Illinois Student Assistance Commission, Chicago, allocated a total of $135 million to three hedge fund managers, its first move in the area.
The three are among 13 hedge fund firms approved to run assets of the $982 million College Illinois! Prepaid Tuition Program fund.
Balestra Spectrum and Pinnacle Natural Resources were assigned $55 million each, while Neuberger Berman’s NB Alternative Investment Management got $25 million, according to an ISAC report. All three are hedge funds of funds.
The ISAC prequalified Sanborn Kilcollin Partners, Reynoso Asset Management, Protege Partners, Pluscios Management, Permal Group, Leading Edge Investment Advisors, Guidance Capital, Echelon Capital Group/Centennial Partners, Common Sense Investment Management and Cadogan Management as well as Balestra Capital, NB Alternative Investment Management and Pinnacle Asset Management, according to Paul Palian, commission spokesman.
The funding came from a combination of new cash and from reducing a Wilshire 5000 index fund managed by RhumbLine Advisers to $152.4 million and an S&P 500 index fund managed by SSgA to $105 million.
A time frame hasn’t been set for funding the other hedge fund managers, Mr. Palian said. Their funding would come from cash, he added.
ISAC revised its asset allocation policy to set a 15% target allocation, in a range between 5% and 20%, for hedge funds and hedge funds of funds. The new funding represents a 13.7% allocation.
Marquette Associates, ISAC’s investment consultant, assisted in the changes.
