15/12/2009 Author: Kapila Gohel

Philadelphia set to hire more single managers

The City of Philadelphia Board of Pensions and Retirement will look to hire more single manager hedge funds next year as it moves to split its investments 50/50 between funds of hedge funds (FoHFs) and direct managers.

The City of Philadelphia Board of Pensions and Retirement has a 6% hedge fund target. “Currently we are over at 6.5%, with FoHFs making up 65% and single managers 35% of the hedge fund allocation,” Chris McDonough, chief investment officer at $3.5bn City of Philadelphia Municipal Pension told HFMWeek.

To accommodate the increase in direct investments, the City of Philadelphia plans to reduce its FoHF investments, according to McDonough.

The board has already hired a number of hedge funds this year, most recently it approved a $10m allocation to Mason Capital Management this month, which is yet to be funded.

The board recently allocated $10m each to Regiment Capital Advisors, the Advent Convertible Arbitrage Fund and Caspian Capital Partners.

Philadelphia’s FoHF allocations include K2 Advisors and Lighthouse Investment Partners (both hired this year), Attalus Multi-Strategy Fund, Arden Asset Management, and Mesirow Non-Directional Fund. Its direct funds include Taconic, Diamondback, Paulson & Co and Karsch.

The board redeemed a $25m investment with a FoHF managed by Goldman Sachs in March this year, HFMWeek reported at the time.