12/05/2010 Author: Kapila Gohel

Michigan city pension drops Muirfield FoHF

The City of Southfield Fire and Police Retirement System in Michigan has terminated one of its three funds of hedge funds (FoHF) managers.

The City Treasurer’s office, which manages the around-$200m pension fund, decided to drop Muirfield Capital Management due to underperformance, Irv Lowenberg, treasurer at the City of Southfield, told HFMWeek.

The $2m investment in Muirfield was divided equally between Attalus Capital and the Nantucket Hedge Fund, which also have investments of $2m each from City of Southfield.

The pension has 5% limited allocation to alternatives; $6m invested in hedge funds and the rest in high-yield bonds, due to its size.

However, the Michigan Association of Public Employee Retirement System (Mapers), of which City of Southfields is a member, is in the process of campaigning for more flexibility to invest in alternatives, including private equity and hedge funds.

“We are hoping to allocate additional assets to alternatives,” Lowenberg told HFMWeek at the end of 2009.
Mapers joins other US pension boards, including the Jacksonville Fire & Police Pension Fund in Florida, in lobbying respective states for greater freedom to diversify into alternatives.