25/03/2010 Author: Kapila Gohel

Episcopal Church fund halts hedge fund plans

The Episcopal Church endowment fund, which was around 300m in size at the end of 2009, has put plans to expand its hedge fund portfolio on hold.

The endowment fund heard presentations from hedge funds Lighthouse Partners and Grosvenor Capital Management late last year, however a source at the endowment’s treasurer’s office revealed the investment process has now been suspended.

“We were thinking of investing with the funds but that idea has been put to rest for the time being, due to the markets,” the source said.

While the endowment portfolio is invested heavily in equities, the Church made a small allocation to hedge funds at the end of 2008, amounting to around $5m. Total hedge fund investment remains at under 10% of the total investment portfolio.

Meanwhile, the Episcopal Church Pension Fund (CPF), which has $9bn in assets, was an early investor in hedge funds, referred to as ‘specialised strategies’ in its portfolio. The 10% allocation includes distressed debt and merger arbitrage in addition to equity-based funds, and many of those strategies include non-US investments. Alternatives represent more than 38% of CPF’s equity assets. CPF’s asset allocation remains unchanged since 2006.