25/01/2012 Author: Kirstie Brewer

Colorado FPPA makes first hire in a series

The $2.9bn Colorado Fire & Police Pension Association (FPPA) is poised to allocate around $35m to a new long/short equity manager, in the first of a raft of hedge fund allocations that will eventually total $270m, Scott Simon, chief investment officer for the pension, told HFMWeek.

The first fund, which is currently undergoing due diligence, should officially be hired in March, and then up to two fresh hires will follow every month until the $270m mandate is completed, Simon said.

The move comes after Austin Cooley, alternatives investment officer at FPPA, recommended that 20% of the global equity portfolio, which has an overall target allocation of 45%, be reinvested in up to ten hedge fund managers, HFMWeek reported in October last year.

The main objective of the new plans is to “lower the amount of equity risk within the portfolio and improve the overall risk-adjusted performance of the fund”, according to Cooley, who also asked that the board hire Albourne as a hedge fund advisor.  

In 2011, FPPA allocated $130m to Aetos Capital, a long/short equity manager, and is currently the pension fund’s first and only direct hedge fund investment, while Gam and K2 Advisors share an even split of the plan’s $200m allocation to the fund of hedge funds (FoHF) space.