06/04/2011 Author: Shannon Hawthorne

Kentucky Uni endowment doubles hedge fund target

The $920m University of Kentucky Endowment Fund has doubled its target allocation to hedge funds, HFMWeek has learned.

The endowment fund, which has been investing in hedge funds since 2009, increased its target allocation from 10% to 20% in December last year, following a recommendation made by investment consulting firm RV Kuhns & Associates in September, recently released investment committee minutes reveal.

The increase was shared between the fund’s three existing hedge fund managers: Grosvenor, Gam and Berens.

Previously, the endowment targeted a 4% allocation to Grosvenor, 4% to Gam and 2% to Berens. However, as a result of the increase, the three funds will now receive 12%, 5% and 3%, respectively, of the 20% target, with a part of Grosvenor’s increase to be invested in its new See Blue fund, which, according to the committee minutes, is “a separate fund of funds created for the University of Kentucky”.

The change came as a result of an asset allocation study conducted by RV Kuhns last year.

The fund’s new investment policy is designed to “reduced the projected risk of the endowment”, the September investment committee minutes stated, adding that the new asset mix is expected to reduce risk by 0.78% but also marginally reduce returns – by 0.08%.The $920m University of Kentucky Endowment Fund has doubled its

target allocation to hedge funds, HFMWeek has learned.

The endowment fund, which has been investing in hedge funds since 2009, increased its target allocation from 10% to 20% in December last year, following a recommendation made by investment consulting firm RV Kuhns & Associates in September, recently released investment committee minutes reveal.

The increase was shared between the fund’s three existing hedge fund managers: Grosvenor, Gam and Berens.

Previously, the endowment targeted a 4% allocation to Grosvenor, 4% to Gam and 2% to Berens. However, as a result of the increase, the three funds will now receive 12%, 5% and 3%, respectively, of the 20% target, with a part of Grosvenor’s increase to be invested in its new See Blue fund, which, according to the committee minutes, is “a separate fund of funds created for the University of Kentucky”.

The change came as a result of an asset allocation study conducted by RV Kuhns last year.

The fund’s new investment policy is designed to “reduced the projected risk of the endowment”, the September investment committee minutes stated, adding that the new asset mix is expected to reduce risk by 0.78% but also marginally reduce returns – by 0.08%.