14/04/2010 Author: Kapila Gohel

Santa Barbara pension looks to replace Arden

The $1.7bn Santa Barbara County Employees’ Retirement System (SBCERS) has terminated its only hedge fund manager, Arden Asset Management, but will look to replace the investment this summer.

“We let Arden go because we are looking for a broader fund of hedge funds (FoHF) mandate,” Donald Kendig, trustee on the board of retirement at the pension fund, told HFMWeek.

The approximately $30m investment with Arden’s FoHF will be liquidated in June this year. Following that, SBCERS will start a search for a new FoHF manager.

“We are looking for a broader more diversified product with more branches across its strategies such as currency and commodities,” said Kendig. “Arden had another broader product, but we wanted to take it to the market again and chose not to invest with them.”

In the meantime, the board of trustees is brushing up on its hedge fund knowledge, starting with an education session next month with its consultant PCA.

While direct hedge funds are not currently an option, due to SBCERS’s lack of in-house expertise in the product area, Kendig added that the pension is currently looking to employ a chief investment officer, which may change things in the future.

SBCERS plans to increase its hedge fund allocation, classed as ‘real return’, to 6% by 2011, were initially reported by HFMWeek in March last year, but so far, it has only 2% invested. Tom Ford, former-interim retirement administrator, said at the time that the new allocation will go to either funds of hedge funds (FoHFs) or the system may choose to invest directly.