17/08/2011 Author: Kirstie Brewer

Houston pension makes two further allocations

The $2.1bn Houston Municipal Employees’ Pension System (HMEPS) has allocated $10m to multi-strategy fund Wexford Spectrum, and $5m to event driven fund York Capital Management, in the second stage of its hedge fund and absolute return allocation programme, HFMWeek can exclusively reveal.

The retirement system, which has around 13,000 active members, will now begin a new search for further hedge funds, in the third and final stage of its absolute return programme.

HFMWeek revealed last year that HMEPS planned to implement a three-stage hedge fund allocation process, which would see the fund hiring 12 to 15 managers, increasing its hedge fund investment from just over $20m to $100m over the course of the first three quarters of 2011.    

The system kick-started its new investment strategy in Q1 this year, investing $5m in both Davidson Kempner Institutional Partners and Anchorage Advisors’ Capital Partners, and a further $10m each to Ox Management’s Domestic Partners and Paulson’s Advantage fund.   

The new $15m allocations have boosted the system’s hedge fund portfolio up to $69m, and are the fulfilment of an absolute return allocation created in 2008, which allows HMEPS to invest up to 5% to hedge funds, a HMEPS spokesperson confirmed.  

So far, the retirement system’s hedge fund portfolio comprises of single manager hedge funds, as opposed to funds of hedge funds, though a spokesperson told HFMWeek back in November that, “some non-hedge fund single manager multi-strategy products may also be appropriate”.