New York pension funds poised to make first investments in hedge funds following new consultant hire

by Amy Bensted

  • 10 Jan 2011
  • HF

The New York City pension funds for employees, police officers and fire-fighters, which manage combined assets of USD 63 billion, have selected hedge fund consultant Aksia to advise on their nascent hedge fund investment programmes. This decision was reached in late December following initial searches which began in July. Since the three pension funds decided to carve out their first hedge fund investments back in 2008, the USD 37 billion NYC Employees Retirement System planned a 3% allocation whilst the USD 21 billion NYC Police Pension Fund and the USD 7 billion NYC Fire Department Pension Fund both instituted allocations of 3-5% in hedge funds. Initial plans to focus on funds of hedge funds have been scrapped following the election of John Liu as comptroller for New York City. The pension funds now plan to invest mainly in single-manager hedge funds to avoid the extra layer of fees. The three pension funds are governed by different boards of trustees but with the same investment staff overseeing the funds. The pensions generally pursue investment strategies in tandem, pending individual board approval.

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