21/04/2010 Author: Kapila Gohel

San Bernardino set to look at direct lending

The San Bernardino County Employees’ Retirement Association (SBCERA) will consider direct lending investment opportunities at the end of the year, James Perry, investment officer, told HFMWeek exclusively.

Currently, the $5bn pension is conducting a search for around six long/short equity hedge funds, which will draw to a close at the end of the month. SBCERA will review the applicants following that: “We will bring our selections to the board of trustees between June and August,” said Perry.

SBCERA will award $25m apiece to the selected managers. After that Perry, who is responsible for public markets including hedge funds, revealed he will be surveying the direct lending space.

The investment team, along with consultant NEPC, is working on the search, which is not an open request for proposal due to the fact that SBCERA is not looking for typical long/short equity strategies.

“We are looking at high-alpha managers, not the typical 30/50 long-beta managers,” Perry told HFMWeek in January.  So far they have received responses from 71 managers.

The current hedge equity mandate is part of SBCERA’s 20% equities allocation, not the 10% absolute return portion of the portfolio.