13/07/2011 Author: Shannon Hawthorne

Texas County to add $1bn to hedge fund portfolio

The $18.2bn Texas County & District Retirement System (TCDRS) invested an additional $1bn into hedge fund strategies in March, HFMWeek has learned.

The move follows a decision made by the retirement system to increase its absolute return target from 15% to 20% during the same month, also revealed by HFMWeek at the time.

TCDRS boosted its allocations to 20 funds in total, including total additional investments of $120m to three credit funds, $30m to one distressed fund, $140m to two global macro funds, $60m to two event-driven funds, $240m to six long/short equity funds and $220m to five multi-strategy funds.

The retirement system also made five new allocations as part of a separate distressed debt portfolio, investing $30m each to Avenue Europe Special Situations, Santaky Credit Opportunities V, Victory Park Capital II and Davidson Kempner Long-Term Distressed Opportunities Fund, as well as allocating $50m to Oaktree Capital Management’s European Prinicipal Fund III.

Additionally, TCDRS allocated $50m to MKP Structured Credit Strategies as part of an opportunistic credit portfolio.
As of 31 March, TCDRS allocated $3.4bn (or 18.9%) to hedge funds, compared to a target allocation of 20%.

Back in December, TCDRS boosted its absolute return portfolio by $50m, adding $15m to its existing investment in credit hedge fund MKP Credit, $10m to long/short equity fund Meditor European and $25m to multi-strategy fund Wexford Spectrum, as reported by HFMWeek earlier this year. The retirement system was already allocating $75m to all three hedge funds.