26/07/2011 Author: Shannon Hawthorne

City of Austin pension liquidates Excelsior

The $506.5m City of Austin Police Retirement Fund is liquidating one of its hedge fund investments, HFMWeek has learned.

According to the minutes of the retirement board’s June meeting, the investment committee approved the withdrawal of its investment in Texas-based hedge fund Excelsior Investors “to the amount of $1.2m”, though the fund still has a $1.5m side pocket investment in the fund.

Talking to HFMWeek, financial officer Vernon Webb cited “poor performance” as one of the main reasons behind the decision, adding that “as a governmental non-taxable entity”, the retirement fund was unable to own more than 10% of the hedge fund. “It was a restriction that we just kept hitting,” he said.

The retirement fund currently allocates around 9.5% of its portfolio to five hedge funds.

The liquidation is the latest in a number of changes made to the City of Austin’s investment portfolio over the course of 2011.

Back in May, HFMWeek revealed that the investment committee approved a $5m allocation to the JLP Credit Opportunities Fund, as well as the transferral of its $1.6m investment in the Clinton Group equity strategy into the firm’s Magnolia multi-strategy fund.