As part of my ongoing series on big funds you’ve never heard of, I think I’ve found another big fund you’ve never heard of. Ready? Here we go:
- The fund is worth roughly $12 billion. So, yeah, it’s big.
- The fund secures the defined benefit pensions of over 100,000 people, and it can trace its roots all the way back to 1925.
Any ideas? Onward:
- The fund’s asset allocation includes a strategic allocation of 5% to “covered calls”. (You don’t see that everyday.)
- In fact, the fund’s permitted derivate instruments include: Futures; Options on stocks, indices, ETFs, and bonds; Currency forwards; Swaps; and .. hey why not ... Options on futures, swaps, and currency. (The fund is also considering an allocation to futures on options on swaps on currency, according to my imagination, but has not yet received approval.)
Any ideas? Still not sure? OK, here are a few final clues:
- The fund’s CIO was once an elementary school teacher in the City of Compton (for real) before he worked at the Fed and did other finance-type stuff.
- The fund is looking to double the size of its investment team in the year ahead... from 3 people to 6 people.
Last hint:
- The fund headquarters are on... an Island.
Got it?
Well if you don’t know it by now, you never will. So without further ado, the ‘big fund that I’m betting you’ve never heard of’ is...
The Investment Office of the Employees’ Retirement System of the State of Hawaii.
I think this is a cool one that’s worth checking out, as it’s doing a lot of rather interesting things with its portfolio. In fact, if you’re really searching around for some summer reading, I found this investment manual to be worthwhile. Anyway, that’s all for this edition of BFYNHO. Until next time...
