Michigan Municipal Employees’ Retirement System, Lansing, will invest $100 million in a market-neutral long/short equity hedge fund strategy managed by Connor Clark & Lunn Investment Management, pending successful contract negotiations.
The strategy will invest in and short Canadian small- and midcap equities for the $9.1 billion fund using robust risk management to offer “extremely strong downside protection and low beta to equity markets,” said Jeb Burns, MERS chief investment officer, in an interview.
He said the long/short fund is a “perfect liquid strategy” for the system’s allocation to diversifying strategies, which includes a number of less liquid alternative investments.
MERS also will invest $25 million, initially, pending successful contract negotiations, in an active core emerging markets equity strategy managed by Lee Munder Capital Group.
The firm will be part of what MERS calls its emerging strategies allocation, which uses a “bullpen approach,” Mr. Burns said.
“We are putting some of our managers who are definitely ready for prime time and larger allocations in this category so we can give them more assets and bulk up our allocation when the time is right,” explained Mr. Burns.
