Institutional Investors

PennSERS halves hedge fund allocation

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The $24 billion Pennsylvania State Employees Retirement System will halve its allocation to hedge funds as a result of dropping its long-term investment target to funds of hedge funds to 9% from a current allocation of 17.9%.

The pension system’s trustees have adopted an updated strategic investment plan that has a greater allocation to fixed-income investments (26%) and stocks (39%) to meet the liquidity needs arising from the projected increase in benefit payouts as the fund matures.

The move comes as PennSERS’ trustees are understood to have placed Pacific Alternative Asset Management Company, its largest holding in the