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| | Michael Cherry: I’m really reticent about putting all our eggs in just one basket |
When the Knoxville, Tenn., pension for city workers ran into trouble with its funds-of-funds managers, investment officials at the $474 million plan knew it was time to retool the portfolio. But rather than deciding to bypass intermediaries and go direct, as many of its peers have done lately, the pension opted to hire some new funds of funds instead. Michael Cherry, executive director of the City of Knoxville Employees’ Pension System of Tennessee, says that getting access to hedge funds through funds of funds allows the pension to quickly diversify the managers and strategies in its portfolio while reducing risk.
“What we’d like to get out of it would be more akin to fixed-income type volatility, but with returns more comparable to equities,” he says. Cherry recently hired the New York fund of...