The Wyoming Treasurer’s Office, which manages the nine Permanent Funds, approved a $150m allocation in the Grosvenor Global Recovery Fund managed by Grosvenor Capital Management.

Wyoming already invests $240m each with Paamco and Aurora Investment Management.

As a result of the market conditions in 2008, the Wyoming Treasurer’s Office decided to officially increase the hedge fund allocation from 5% to 7.5%, according to Michael Walden-Newman, chief investment officer. Even before that, the Treasury had already increased its investments with the two existing managers.

“We are not opportunistic or nimble in our investment strategy, but we believed, this time, our hedge fund managers were well placed to take advantage of market dislocations, so we upped their funding,” he said.

The Permanent Funds are now at their target and will not be looking at further investments in hedge funds for the foreseeable future, he added.

Wyoming has chosen the FoHF route but hasn’t discounted direct investing in the future. “Due diligence is paramount for us,” said Walden-Newman. “Partnering with our investment managers to do the due diligence on underlying managers gives our staff a chance to better educate ourselves and will equip us for possibly going direct in the future.”

The US’s other sovereign wealth funds are the $26.7bn Alaska Permanent Fund, the $3.1bn Alabama Trust Fund and the $12.9bn New Mexico Permanent Funds.