Massachusetts Pension Reserves Investment Management, Boston, hired Arden Asset Management to facilitate the transfer of about $2.8 billion to more than 20 hedge fund firms in which the pension system invests directly, confirmed Stan Mavromates, PRIM's chief investment officer.
The assets are coming from four hedge funds-of-funds firms under a new direct program launched by the $50 billion pension fund late last year to reduce both manager overlap and fees.
In April, the PRIM board approved plans to terminate the four fund-of-funds providers — Arden, which managed $560 million for PRIM as of March 31; K2 Advisors, with $821 million; Grosvenor Capital Management, $728 million; and Rock Creek Group, $742 million. It also approved searching for a firm to help transition those assets to the hedge funds with which PRIM began investing directly last October.
Mr. Mavromates said a chunk of the $2.8 billion will involve direct transfers, as 14 of the hedge funds PRIM hired for direct investment already were managing money for the pension system under the fund-of-funds program. The bulk of the remaining assets should be transferred by the end of 2013, but with different hedge funds offering liquidity at different intervals, the process might only be completed by July 2014, he said.
Pacific Alternative Asset Management Co. will continue to manage about $750 million in an emerging markets hedge fund of funds for PRIM.