13/07/2011 Author: Shannon Hawthorne

City of Manchester Retirement reviews Gottex investment

The $154m City of Manchester Employees’ Contributory Retirement System (MECRS) is reviewing one of its hedge fund managers, HFMWeek has learned.

During the June meeting of the New Hampshire pension fund’s board of trustees, executive director Gerry Fleury reported on a conference call with NEPC, the system’s investment consultant, which noted that the firm was “no longer recommending Gottex [Fund Management] and has placed a neutral rating on them for existing investors”, meeting minutes reveal.

While the pension scheme has no immediate plans to terminate the manager, noting that the firm’s current AuM of $8bn, compared to a high of $15bn “should make it easier for them to focus on return strategies”, a NEPC representative recommmended that “if AuM should suddenly begin to increase in correlation with a decline in the rate of return, that the question of replacing the manager would need to be revisited”.

Earlier this year, the City of Manchester terminated Attalus Capital following concerns over “lacklustre” performance and “levels of key-person risk”.

As a result of the review, which was first revealed by HFMWeek in March, the retirement system hired fund of hedge fund Permal as a replacement manager last month.