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5yrs ago Hedge Fund hfm.global Views: 432

The $17.7bn Kentucky Retirement Systems has launched a search for someone to head up its Office of Investments.

KRS manages 10 retirement and insurance funds covering hazardous and non-hazardous state and local government employees and state police. Rich Robben has served as KRS’ interim CIO since the departure of David Peden in 2017.

KRS has been slashing its hedge fund exposure since the end of 2016, when it announced it was cutting its $1.6bn absolute return portfolio by at least $800m, with event-driven, equity long/short and market-neutral strategies predominantly targeted.

In May this year, it submitted a redemption request to the Credit Suisse SPF Fund, while in August it gave notice to the Prudential GRV Fund, according to recent meeting minutes.

In June, it received the bulk o fits redemption proceeds from Anchorage Capital, Coatue Management and Davidson Kempner. Last year, the pension redeemed from Pine River, LibreMax Partners and Knighthead Capital Management, among others.

As of 30 June 2018, KRS had some $470m invested in hedge funds.

The state’s $2bn retirement fund for non-hazardous state employees, KERS, is generally considered to be the worst funded pension in the United States, with only about 13% of the assets it needs to pay benefits over the next 30 years.

Years of underfunding by legislators and lackluster investment returns, combined with incorrect actuarial assumptions about growth of the state workforce and pay increases have all contributed to the abysmal funding situation.

The $7.1bn pension fund for non-hazardous local government employees, CERS, is in much better shape comparatively, with an estimated 52.7% of assets it needs to pay benefits. The $663.7m KERS hazardous fund is 55.5% funded, the $2.4bn CERS hazardous is 48.4% funded and the $269.8m state police fund is 27.1% funded.

FoHF Paamco Prisma, which is involved in a lawsuit with Kentucky state employees, managed some $537m for KRS. It has also started returning capital to the pension, with the liquidation process estimated to complete in 2021.

The RFP is available on the state’s vendor self-service page under the title “Executive Director for Office of Investments.” The duties of the executive director of the investments office are equivalent to those of a CIO. The self-service page can be accessed here.

Proposals from interested candidates are due in KRS’ offices in Frankfort by 4pm ET on 16 November.

KRS uses Wilshire as its general investment consultant.

Kentucky Retirement Systems looking for investments chief on HFM InvestHedge.


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