Ohio Public Employees Retirement System, Columbus, is preparing to invest about $1.2 billion in its first direct investments in single and multistrategy hedge funds, confirmed Michael Pramik, spokesman for the $76 billion fund, in an interview.
The system hired specialist hedge fund consultant Cliffwater in April to provide due diligence and manager recommendations to staff on a non-discretionary basis. OPERS will seek hedge funds managing at least $1 billion, Mr. Pramik wrote in an e-mail. RFPs will not be issued; interested managers should contact OPERS directly.
The initial round of hedge fund manager hires and funding is expected to be completed in the third quarter, Mr. Pramik wrote.
In July 2010, OPERS' trustees increased the fund's hedge fund allocation to 3%, or about $2 billion of plan assets. Prior to the increase, the system had just $100 million invested through hedge funds of funds.
Pacific Alternative Asset Management was one of the fund's original hedge fund-of-funds managers, managing about $54 million as of Sept. 30. OPERS committed an additional $250 million to PAAMCO in October as part of the hedge fund-of-funds buildout. However, after PAAMCO was the subject of an SEC investigation last year, the assets were redeemed and funding of the new mandate is on hold, Mr. Pramik wrote in his e-mail. The PAAMCO probe was concluded last April without any enforcement action taken.