US – Investment staff at Calpers, the world’s second largest pension fund, are to recommend that the fund raise its one billion dollar (930 million euro) allocation to hedge funds when the fund’s investment committee meets in June.

That’s according to minutes of the committee’s December meeting posted to the California Public Employees Retirement System’s website. The investment committee meets each month.

The Joint AIM/Global Equity Hedge Fund Program, which the fund’s staff have recommended change its name to the Joint AIM/Global Equity Absolute Return Strategies Program, was established as Calpers increased efforts to enter into the hedge fund market.

Since its initial investment on April 1 2002, up to end of 2002, the program posted a –0.9% return, net of fees, compared to the benchmark which returned –7.7%.

In addition to wishing to increase the assets allocated to the program, Calpers is also looking at building a so-called Spring-Fed Pool of strategic advisors, recommending the investment committee allow staff to select multiple strategic advisors through a focused competitive solicitation search.

A pool would have the benefits of expanding the universe from which to select managers. This would provide another level of due diligence on the managers being considered and monitored, and allow Calpers to negotiate better fee arrangements. Staff are recommending that Blackstone Alternative Asset Management, which sees its contract expire in June, be included in this pool.

As of October 2002, Calpers had 132.6 billion dollars in assets under management.

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