05/10/2011 Author: Kirstie Brewer

Stamford Police Pension redeems from Hildene

The $160m Stamford Police Pension Board, Connecticut (SPPB) is looking to redeem a further $2m from its $11.8m investment in Hildene Capital Management and has hired a new investment consultant that is more willing to look at allocating directly to hedge funds.

Tom Deegan, SPPB trustee, told HFMWeek that Hildene has been a “wonderful investment” and explained: “the only reason SPPB has redeemed in the past, and may continue to redeem is to lower the overall percentage that Hildene represents in the portfolio while maintaining an allocation that is within our mandate.”

SPPB has also appointed investment consultant Clearbrook Advisors, a decision motivated primarily by the consultant’s willingness to look at individual managers in addition to funds of hedge funds (FoHFs). 
 
“We have found FoHFs to be very costly due to the double layer of fees. In an up market people tend to rationalise the use of FoHFs because of the access to managers, market knowledge and due diligence. However, in a down market, the fees accelerate the depletion of assets,” Deegan explained.   

SPPB, which can invest up to 20% in alternatives, redeemed $2m from Hildene Capital in June, as a way of “harvesting profits” from the fund, HFMWeek reported at the time.   

“We do not anticipate any further redemptions until Clearbrook is fully up to speed, has completed their portfolio review and manager due-diligence. As such, I would imagine we will not make any significant moves before Q1 2012.” Deegan said.