Key Takeaways
- • The Fire & Police Pension Association of Colorado (FPPA) approved $240 million in new hedge fund commitments, including $200 million to Millennium's flagship multistrategy fund and $40 million to NovaCore, according to reporting by Alternatives Watch and Pensions & Investments.
- • NovaCore is a European industrials-focused market-neutral strategy founded by former Citadel portfolio manager Nico Dil.
- • Diversifying strategies represented 11.1% of FPPA's $7.74 billion long-term portfolio as of September 2026, slightly above an 11% target.
- • New Mexico's Public Employees Retirement Association (PERA) is reviewing whether to eliminate its hedge fund allocation, which has an absolute return target of 6% within a 3% to 9% range; no final decision has been made.
- • The divergence reflects an allocator debate: large multistrategy platforms keep attracting capital, while smaller plans question whether broad hedge fund programs justify their fees and complexity.
Summary
Two US public pensions are taking opposite positions on hedge funds. The Fire & Police Pension Association of Colorado has approved $240 million of new hedge fund commitments, while New Mexico's Public Employees Retirement Association is considering eliminating its hedge fund allocation entirely, according to Alternatives Watch and Pensions & Investments, as reported by HedgeCo.Net.
FPPA's commitments include $200 million to Millennium's flagship multistrategy fund and $40 million to NovaCore, a European industrials-focused market-neutral strategy founded by former Citadel portfolio manager Nico Dil. As of September 2026, diversifying strategies made up 11.1% of FPPA's $7.74 billion long-term portfolio, slightly above an 11% target that spans global macro, multistrategy, low-beta long/short equity, alternative beta and opportunistic strategies. The commitments follow an earlier review this year in which FPPA decided to wind down its dedicated long/short equity allocation and raise its target weighting to diversifiers, concentrating hedge fund exposure in fewer, more differentiated strategies.
New Mexico PERA, by contrast, is reviewing whether hedge funds still merit a place in its portfolio. Its investment policy targets absolute return at 6% of assets, within a 3% to 9% range. The review follows a reported $100 million redemption from Two Sigma Investments in September and a $100 million withdrawal from a Rockwood Capital multifamily real estate fund. PERA has not reached a final decision or said how any proceeds would be redeployed.
The contrasting moves capture the current allocator debate. Large multistrategy platforms continue to attract capital from investors seeking uncorrelated returns, while smaller plans are questioning whether the fees and complexity of a broad hedge fund program are justified. Managers with clear diversification profiles appear best positioned as pensions grow more selective.
FPPA's commitments include $200 million to Millennium's flagship multistrategy fund and $40 million to NovaCore, a European industrials-focused market-neutral strategy founded by former Citadel portfolio manager Nico Dil. As of September 2026, diversifying strategies made up 11.1% of FPPA's $7.74 billion long-term portfolio, slightly above an 11% target that spans global macro, multistrategy, low-beta long/short equity, alternative beta and opportunistic strategies. The commitments follow an earlier review this year in which FPPA decided to wind down its dedicated long/short equity allocation and raise its target weighting to diversifiers, concentrating hedge fund exposure in fewer, more differentiated strategies.
New Mexico PERA, by contrast, is reviewing whether hedge funds still merit a place in its portfolio. Its investment policy targets absolute return at 6% of assets, within a 3% to 9% range. The review follows a reported $100 million redemption from Two Sigma Investments in September and a $100 million withdrawal from a Rockwood Capital multifamily real estate fund. PERA has not reached a final decision or said how any proceeds would be redeployed.
The contrasting moves capture the current allocator debate. Large multistrategy platforms continue to attract capital from investors seeking uncorrelated returns, while smaller plans are questioning whether the fees and complexity of a broad hedge fund program are justified. Managers with clear diversification profiles appear best positioned as pensions grow more selective.
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