New York City Police Pension Fund will make its first hedge fund allocation to fund-of-funds manager Permal Group, confirmed Michael Loughran, a spokesman for city Comptroller John C. Liu.
Permal will manage $150 million, subject to successful contract negotiations, according to a source within the comptroller's office who asked not to be identified.
Funding for the hire will come from the fund's opportunistic equity portfolio, Mr. Loughran said. The fund has not set a target hedge fund allocation. Mr. Loughran declined to say how large Permal's allocation will be.
Investment professionals in the city comptroller's office have been researching and considering hedge fund investments by the city's five pension plans since at least 2005, according to previous reports in Pensions & Investments, but the $23.1 billion police plan is the first to finally make an investment. Mr. Liu oversees investment of the five plans under the $113.9 billion New York City Retirement Systems.
The mandate was approved at a police fund board meeting Tuesday, Mr. Loughran said in an interview.
The Permal investment is “consistent with the long-term objectives of providing reliable returns, reducing investment volatility, and capitalizing on the changing market landscape,” Larry Schloss, chief investment officer of the New York City Retirement Systems, said in a news release. He said the police plan will follow the hedge fund-of-funds investment with “a series of direct investments in hedge funds.”