Texas Employees Retirement System, Austin, announced its first six hedge fund managers and approved investing up to $405 million total with them, according to a webcast of the Tuesday board meeting.
As of Aug. 1, the $21.2 billion system has invested $300 million in the new hedge fund program. It invested, or committed, $80 million each to a multistrategy hedge fund managed by Arrowgrass Capital Partners, a macro fund managed by MKP Capital Management, an event-driven fund managed by Southpaw Asset Management and a relative value fund managed by Claren Road Asset Management; $50 million to a long/short fund managed by Walker Smith Capital and $35 million to a macro fund managed by Aspect Capital.
The system has not funded $20 million of the MKP fund yet, nor has it funded Aspect and Walker Smith's commitments, according to the webcast.
The system plans on doubling its hedge fund investments and hiring eight to 12 new managers in fiscal year 2013, which starts Sept. 1.
Separately, staff announced the system made a $70 million co-investment commitment to Panda Temple Power Project, a natural gas fueled combined-cycle facility, on July 17. The board did not disclose the other two investors. The commitment was part of the system's special situation allocation, which has a target of 0% to 3%. Panda Energy International is the general partner.
Separately, the retirement system reported it returned 1.1% for the year ended June 30, compared with its benchmark of 1%. The top one-year returns were fixed income, 8.2%, followed by real estate, 7.2%; domestic equity, 3.6%; private equity, 1.6%; and international equity, -13.3%.