Texas Employees Retirement System, Austin, came close to meeting the 5% target allocation to its dedicated hedge fund portfolio.
Investment officials of the $25.4 billion pension fund invested a total of $670 million in 2014 with seven hedge fund managers, six of which were for the fund’s dedicated hedge fund portfolio and one for the global equity portfolio.
For the dedicated hedge fund portfolio, ERS hired the following managers, said Sharmila Chatterjee Kassam, deputy chief investment officer, in an e-mail:
- Castle Creek Arbitrage, $100 million;
- Taconic Capital Advisors, $100 million;
- Aristiea Capital, $60 million;
- Pharo Management, $60 million;
- Wells Street Partners, $50 million; and
- Northwest Investment Management, $50 million.
Separately, ERS invested $250 million in Marshall Wace’s TOPS World Equities strategy for the global equity portfolio.
As of Sept. 30, ERS had $1.5 billion, or 5.7% of overall assets, invested in hedge funds; $1.1 billion, or 4.5% of total assets, was in the pension fund’s dedicated hedge fund portfolio. The remainder was in hedge funds included in the pension fund’s other asset classes, including public equity and public real estate, Ms. Kassam said.
Texas ERS began its direct investment program in hedge funds in 2012.