The Ohio Sers board conducted a global hedge fund review at the end of 2009.

“In 2010, Sers’ investment staff expects to allocate additional capital to existing funds, trim allocations to balance target manager weights of 3.5‐5%, and seek board approval for new hedge fund managers (if needed),” stated Sers in a memo.

The pension does not have a target for hedge funds as such, but a cap, according to a spokesperson. “Our policy says we can invest up to 10% of fund assets in hedge fund strategies.  We’ve been slowly inching toward that number (about 6% as of Jan 2010),” he said.

With hedge funds rebounding strongly in 2009, Sers believes there are a still a lot of opportunities to invest in the top hedge funds. However, the pension fund must act quickly as the window of opportunity to invest with these managers is probably three-to-six months before they close to investors, the board discussed during the review.

The board is advised on its hedge fund portfolio by Aksia, which recently hired former NEPC senior hedge fund consultant Jaeson Dubrovay. This followed the departure of Aksia principal Jake Walthour in December 2009.

Sers invests only in direct hedge fund strategies and, as of January 2010, the portfolio was around $560m. In 2007, Sers’ board approved a 10% limit for the fund to invest in hedge funds – despite this, investments were made slowly.

Between June and August 2008 an initial allocation of around 2.5% was made. However, in September 2008 the system halted all new hedge fund investments. Activity resumed in February 2009 with the hire of eight new managers and, by October 2009, hedge funds amounted to 5.96% of total fund assets, or $536m.

Ohio Sers’ hedge funds include Tudor, the BlueTrend Fund, Elm Ridge Value Partners, Horseman Global Fund, Lansdowne UK Equity Fund, Dundonald Offshore, Samlyn Offshore, and Theorema Europe Fund.