NYC Pensions Take Hedge Fund Plunge

July 22, 2010 ( – For the first time, New York City Comptroller John C. Liu has released a request for proposal (RFP) to find a hedge fund consultant for three of the five city pension funds. 

The RFP, posted on Liu’s Web site, said his office is trying to find a consultant for the New York City Employees’ Retirement System ($36.73 billion in assets), the New York City Police Pension Fund ($20.99 billion), and the New York City Fire Department Pension Fund ($6.8 billion).   

Liu spokesman Mike Loughran told Bloomberg in a news account that none of the city’s five pension programs have traditionally held hedge fund investments in the past.  

According to the RFP, the consultant will be asked to help the funds formulate investment strategy, goals, objectives, and policies as part of a three-year contract with renewal options for up to another four years.  

The work will include providing strategic advice, new investment identification, evaluation and portfolio monitoring services, which will include risk monitoring, performance and reporting of the portfolio.  The RFP said the consultant will also provide access to investment research, including return, risk, and correlation assumptions of various hedge fund strategies, and the consultant’s own hedge fund manager database. Finally, the work will encompass providing research, education, training, and ongoing client service to staff and the funds. 

Liu said in the RFP that the systems may invest in hedge fund strategies such as absolute return, long/short equity, directional, event driven, merger arbitrage, fixed income arbitrage, convertible arbitrage, currency, multi-strategy and other investment approaches. 

Proposals are due August 9.