Kern County Employees’ Retirement Association, Bakersfield, Calif., made full redemptions from hedge funds managed by Carlson Capital Management and Menta Capital as part of an effort to reduce the number of hedge fund managers on the pension fund’s roster.
The $4.2 billion pension fund redeemed from Black Diamond Relative Value Fund, a long/short equity hedge fund managed by Carlson Capital, and Menta Global Offshore, a quantitative equity market-neutral hedge fund. Kern County Employees had about $18 million invested in each fund, Chief Investment Officer Daryn Miller said in a telephone interview. The redemptions are due to redundant strategies and lower levels of conviction as the pension fund works toward reducing its hedge fund manager lineup to 10 firms from 15, Mr. Miller said.
Separately, the pension fund reallocated its $65 million investment in the PIMCO Commodity Alpha Fund, managed by Pacific Investment Management Co., to its hedge fund asset class from its commodities asset class. The fund invests primarily in market-neutral, relative-value commodity strategies.
Within the commodities asset class, the pension fund then added $45 million and $20 million, respectively, to long-only commodities managers Wellington Management and Gresham Capital Management, giving them respective totals of $100 million and $70 million.
The targets for commodities and hedge funds are 10% and 4%, respectively, and their actual allocations are at their targets, Mr. Miller said.
General investment consultant Verus Advisory and hedge fund consultant Albourne Partners assisted.