Massachusetts Pension Reserves Investment Management Board, Boston, approved a search for a firm to help investment officials of the $63.2 billion pension fund build a portfolio of emerging hedge fund managers.
At a meeting Tuesday, MassPRIM trustees accepted the recommendation of Eric R. Nierenberg, senior investment officer-hedge funds and low volatility strategies, to issue an RFP in late January or early February for managed account service providers to assist with screening, selecting and bringing onto their platform emerging managers for direct investments, said Eric Convey, a PRIM spokesman.
Additional expectations for the emerging manager program adviser will be to provide a managed account investment platform and ongoing management and monitoring of the portfolio, board meeting materials showed.
The initial focus of the program likely will be to invest with global macro and managed futures hedge fund managers because the “defensive nature” of the strategies “could help improve the overall portfolio risk/return profile” by providing “diversification benefits,” according to meeting materials.
Potential hedge fund managers must meet the fund's emerging manager standard of running less than $2 billion or minority- or women-owned, Mr. Convey said.
Further details about the RFP, including the size of the emerging manager program and the timing of a potential hire have not been determined, although Mr. Convey said a selection was likely by July 1, if the board decides to go ahead with the program.
The RFP will be posted on the pension fund's website.
As of Sept. 30, MassPRIM's existing hedge fund portfolio totaled $5.6 billion.
In separate board action, trustees approved a commitment of up to $100 million to Quad-C Partners IX, managed by existing private equity manager Quad-C Management, Mr. Convey confirmed. Information about MassPRIM's investment in prior funds from the manager was not immediately available.