Illinois State Universities Retirement System, Champaign, hired KKR Prisma and Pacific Alternative Asset Management Co. to manage a total of about $500 million in hedge funds of funds, said Daniel L. Allen, chief investment officer, in an e-mail.
The move is the first allocation to hedge funds by SURS, which oversees $16.3 billion in defined benefit assets.
“The specific allocations to the managers will be determined after contract negotiations are finalized with the firms,” Mr. Allen said.
Funding will come as part of the fund's plans to reduce its domestic equity allocation to 23%, from 32%.
The hirings are the result of an RFP issued in March, seeking multistrategy hedge funds of funds in an aim to reduce total plan risk and increase diversification through a 3% allocation.
Investment consultant NEPC assisted in the search.