04/01/2012 Author: Kirstie Brewer

Acera makes first hedge fund hire

The Alameda County Employees’ Retirement Association (Acera) has hired Permal Asset Management for $100m, marking the $5bn pension’s first investment in the hedge fund space, HFMWeek can reveal.

Permal Asset Management, a fixed income holdings fund of hedge funds (FoHF), won the mandate following a board meeting last month, seeing off competition from BlackRock Alternative Advisors and Magnitude Capital.   

The decision comes following the adoption of a Private Equity and Alternatives Return Lending Strategies policy, referred to as ‘Pearls’, which will see $250m allocated to alternatives, 40% of which will be dedicated to the hedge fund space, HFMWeek exclusively revealed last year.

“We believe the industry has matured somewhat and that this particular investment vehicle is now more transparent for a public investor,” Betty Tse, chief investment officer at the pension, told HFMWeek at the time.  

The Californian pension fund, which is advised by Strategic Investment Solutions, decided to invest via a FoHF vehicle on the grounds that it, “would afford an educational opportunity into a variety of hedge fund strategies,” according to Tse, who added that investment in a FoHF would enable fees to be clearly managed and understood.

“It is too early to say whether the board would consider a further allocation to FoHFs in the latter half of 2012 – for the next six months at least, this will be the only allocation”, she told HFMWeek in November.