HedgeCo.Net — Two US public pensions are moving in opposite directions on hedge funds. The Fire & Police Pension Association of Colorado has approved $240 million of new hedge fund commitments, while New Mexico’s Public Employees Retirement Association is considering eliminating its hedge fund allocation altogether, according to Alternatives Watch and Pensions & Investments.
FPPA’s commitments include $200 million to Millennium’s flagship multistrategy fund and $40 million to NovaCore, a European industrials-focused market-neutral strategy founded by former Citadel portfolio manager Nico Dil. As of September 2026, diversifying strategies made up 11.1% of FPPA’s $7.74 billion long-term portfolio, slightly above an 11% target that spans global macro, multistrategy, low-beta long/short equity, alternative beta and opportunistic strategies.
The Colorado commitments follow a review earlier this year in which FPPA decided to wind down its dedicated long/short equity allocation and raise its target weighting to diversifiers, concentrating its hedge fund exposure in fewer, more differentiated strategies.
New Mexico PERA, by contrast, is reviewing whether hedge funds still earn a place in its portfolio. Its investment policy targets absolute return at 6% of assets, with a 3% to 9% range. The review follows a reported $100 million redemption from Two Sigma Investments in September and a $100 million withdrawal from a Rockwood Capital multifamily real estate fund. PERA has not made a final decision or said how any proceeds would be redeployed.
The split captures the current allocator debate. Large multistrategy platforms continue to attract capital from investors seeking uncorrelated returns, while smaller plans are questioning whether the fees and complexity of a broad hedge fund program are justified. Managers with clear diversification profiles appear best placed as pensions become more selective.