Pensions’ Fifty Favorite Hedge Funds | Chief Investment Officer

(August 22, 2012) – What are the most popular hedge funds among pension investment teams worldwide?

Towers Watson knows, and sent aiCIO a list. Here’s a ranking of the top 50, and the total amount of pension assets each one manages as of December 31, 2011.

1. Bridgewater Associates (US) – $47.3 billion

2. BlackRock (UK) – $14.9 billion

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3. Brevan Howard (UK) – $11.5 billion

4. Angelo, Gordon & Co. (US) – $8.6 billion

5. BlueCrest Capital Management Group (UK) – $8.6 billion

6. Och-Ziff Capital Management (US) – $8.05 billion

7. AQR Capital Management (US) – $6.7 billion

8. GoldenTree Asset Management (US) – $5.7 billion

9. Beach Point Capital Management (US) – $4.89 billion

10. D. E. Shaw Group (US) – $4.32 billion

11. Nephila Capital (Bermuda) – $4.28 billion

12. PIMCO (US) – $4.24 billion

13. AHL (UK) – $4.21 billion

14. Winton Capital Management Ltd. (UK) – $4.18 billion

15. Lansdowne Partners (UK) – $4.05 billion

16. Anchorage Capital Group (US) – $3.02 billion

17. Goldman Sachs Asset Management (US) – $2.6 billion

18. GE Asset Management (US) – $2.48 billion

19. Odey Asset Management (UK) – $2.36 billion

20. UBS Global Asset Management (UK) – $2.34 billion

21. Magnetar Capital (US) – $2.2 billion

22. Omega Advisors (US) – $2 billion

23. COMAC Capital (UK) – $1.91 billion

24. Graham Capital Management (US) – $1.77 billion

25. Transtrend (The Netherlands) – $1.72 billion

26. Aspect Capital (UK) – $1.52 billion

27. HBK Capital Management (US) – $1.51 billion

28. Black River Asset Management (US) – $1.49 billion

29. New Mountain Vantage Advisors (US) – $1.47 billion

30. Gramercy (US) – $1.3 billion

31. Arrowgrass Capital Partners (Cayman Islands) – $1.29 billion

32. GLG (UK) – $1.26 billion

33. Bain Capital (US) – $1.25 billion

34. Ascend Capital (US) – $1.23 billion

35. Wellington Hedge Management (US) – $1.22 billion

36. Ivory Investment Management (US) – $1.2 billion

37. Pine River Capital Management (Cayman Islands) – $1.08 billion

38. Fir Tree Partners (US) – $1.06 billion

39. Elm Ridge Management (US) – $1 billion

40. Perry Capital (US) – $890 million

41. Mazi Capital (South Africa) – $747 million

42. Lucidus Capital Partners (UK) – $650 million

43. Knighthead Capital Management (US) – $550 million

44. Aviva Investors (UK) – $534 million

45. Ramius (US) – $483 million

46. BlueBay Asset Management (UK) – $466 million

47. Fore Research & Management (US) – $379 million

48. Highline Capital Management (US) – $378 million

49. Invesco (US) – $352 million

50. Lombard Odier Investment Management (Switzerland) – $337 million

Pension assets make up a large portion of total capital under management for the funds topping this list. Bridgewater, the world’s largest hedge fund, earns that distinction mostly thanks to pension investments. The Connecticut-based fund manages a total of $76.1 billion, 62% of which belongs to pensions. Over half (54%) of BlackRock‘s $27.6 billion in total assets come from pensions, as do one-third of Brevan Howard’s. Further down the list, a handful of other funds owe similarly high portions of their capital to pensions, including AQR (48%), Beach Point (80%), Nephila (78%), GE Asset Management (100%), and Gramercy (87%).

In total, these 50 funds manage $187.57 billion in pension assets, representing 35.8% of the funds’ total assets under management ($524.09 billion). Towers Watson compiled this list using data largely from investment managers, in addition to funds’ public financial statements and a HedgeFund Intelligence publication.

(August 21, 2012) – The Massachusetts public pension system will be handing out a total of $815,000 in performance bonuses this year, following a spate of high-level departures.

“We are paid on a three-year-basis, and our three years are strong,’’ Executive Director Michael Trotsky said in an interview with Boston Globe. “It shows we generated $2.6 billion in excess returns.’’

Over the last three years ending June 30, the Massachusetts Pension Reserves Investment Management Board (MassPRIM) has returned 11.25% on its $48.9 billion in assets. MassPRIM calculates its bonuses based on three-year returns, but the payouts have drawn criticism due to the system’s weaker short-term returns. For the last year, the fund has returned -0.08%. Newspaper articles have called the bonus package “huge,” despite it being, in total, much smaller than many single bonuses in the private sector.

The $815,000 bonus pool will be distributed to most of MassPRIM’s 25-member staff, amounting to nearly 20% of the system’s entire staff payroll. Trotsky will receive the largest bonus at $98,000, on top of his $245,000 annual salary.

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The pension board Chairman and State Treasurer Steven Grossman has publicly criticized the performance bonus system and said he will attempt to overhaul it.

“I think the citizens of Massachusetts would think it inappropriate, and it lacks common sense for any company or public organization to pay bonuses when it lost money,’’ Grossman said to the Boston Globe. However, he did acknowledge in a recent interview with aiCIO that “when you’ve got a CIO vacancy and other senior positions open, it’s challenging.” Former CIO Stan Mavromates departed in June to join Mercer as CIO of its Americas division. We suspect the move involved a pay hike.