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KKR, Alaskans Only Interested In Investing In The Things You *Really* Think Will Make Money

The firm has started a new fund for its best ideas, as opposed to the merely good ones.
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No, Al: Your BEST idea. The E equals one, you know.

KKR’s in-house fund of hedge funds has been doing some thinking. It figures that the job of the hedge fund manager is to make lots of money, and the way to do that is to invest in things that he or she thinks will make lots of money. And it stands to reason that, given those premises, the smart hedge fund manager will invest more in things that he or she thinks will make more money than other things that he or she thinks will make money. Therefore, if you have a good hedge fund manager—and Prisma Capital Management has $10 billion that says it’s pretty good at picking a hedge fund manager—and you invest a bunch of extra money in those manager’s “best ideas,” this should make one a very great deal of money. This is the kind of radical thinking that gets the Alaska Retirement Management Board to consider giving you another $100 million.

KKR Prisma created the strategy in January to invest in some of the highest conviction -- or largest -- holdings from 14 equity-focused hedge fund managers, according to a presentation dated April 23 to the Alaska Retirement Management Board. The pension system had $420 million with KKR Prisma as of March 15 and was scheduled to vote on whether to allocate as much as $100 million to the KKR strategy….

The single largest long positions of hedge fund managers gained more than other picks, KKR said in the Alaska presentation, citing research it had conducted on portfolios from 2004 through 2014. The new strategy will be based on managers’ three largest picks.

KKR’s $10 Billion Prisma Capital Starts Best Ideas Hedge Fund [Bloomberg]

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