San Jose to Make $730 Million Hedge Fund Foray

Two pension plans in San Jose, California, are poised to invest in hedge funds for the first time by deploying $730 million to improve returns.

The City of San Jose’s Police and Fire Department Retirement Plan and the Federated City Employees’ Retirement System seek to invest in 15 to 20 hedge funds in the next six to 12 months, according to Sean Bill, a trustee on the police and fire system’s board. The pension funds’ investment committees hold joint meetings each month and coordinate their activities where possible, he said in a telephone interview.

The pension funds will first search for multistrategy funds, according to Bill. San Jose staff and the pensions’ consultant, London-based Albourne Partners Ltd., have met with 35 managers and may recommend initial investments as early as October, he said. They will eventually seek to add relative value, event-driven, long-short equity and macro funds.

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