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December 20, 2005
Hilton foundation eyes maiden alts foray
The $2.5 billion Conrad N. Hilton Foundation in Los Angeles will conduct a rare asset allocation review that could result in a maiden investment in alternatives and manager changes. "We really want to take a step back and look at the big picture and that includes seriously looking at alternatives," Steven Hilton, the foundation's chairman and ceo, told AIN sister publication Foundation & Endowment Money Management. Not investing in alternatives is "almost unheard of for a foundation our size."
The review was prompted by impending organizational changes at Pacific Financial Research, which manages about $650 million in large-cap value equity, Hilton explained. Because it needs to discuss whether to replace PFR, the fund decided to take the opportunity to review its entire portfolio. "It's an exciting time for the asset side of the foundation because we haven't had to do this in a long, long time," he said.
Cambridge Associates will educate the fund on alternatives. The foundation's first priority will be to set an asset allocation and then "specify the managers we will be looking at going forward," said Hilton. The fund's exact allocation mix could not be learned by press time.
Barrow, Hanley, Mewhinney & Strauss will assume control of Pacific Financial Research at the beginning of the year. The move follows the retirement of PFR principals James Gipson, Michael Sandler and Bruce Veaco. Hilton said the foundation will stick with BHMS "for the time being," but will assess its relationship with the firm when it reviews its assets. PFR has added approximately $80 million to its mandate through good performance over the 15 years it served as a money manager for the firm. "We had a big bet on Pacific Financial and we'll miss them," he said. Tucker Hewes, spokesman for BHMS, declined to comment.
-Institutional Investor-
Posted by su at December 20, 2005 11:58 AM