Worcester Eyes Multi-Strat Hedge Funds, Commodities

James DelSignore

The $664 million Worcester Retirement System is considering allocating to multi-strategy hedge funds, according to AIN sister publication Money Management Letter. "We may do it in the not-too-distant future if the [Public Employees Retirement Administration Commission] approves it," said James DelSignore, the fund's chairman. So far, the fund has $33 million in hedge funds but DelSignore declined to say how large the multi-strategy allocation could be. If funded, assets would come from its investment with the Massachusetts Pension Reserves Investment Trust.

The commodities allocation may be a long shot. "The goal is to buy low and sell high, but it seems that the opposite is happening right now," DelSignore said of the asset class. He attended a commodities workshop at Investment Management Network's 11^th Annual Public Funds Summit in Las Vegas on April 4, which confirmed his opinion that although the asset class has historically provided good returns, it may be too expensive to enter now.

Robert Dennis, investment director at PERAC, said if the multi-strategy funds that Worcester is considering meet its guidelines, he is fairly certain an investment would be allowed. The guidelines direct plans to seek hedge funds with a low correlation to the stock market that are non-directional, diversified, conservative and have a track record. He added that Worcester has so far always chosen hedge fund investments that have met its guidelines. "We just don't want boards choosing overly aggressive strategies without a track record," he added. The fund is advised by Meketa Investment Group.