Darien Hedge Fund Collapses, Threat to KY Pensions

State officials in Kentucky are hoping to get back about $100 million that was invested in a -based hedge fund that recently failed.

According to a report in Kentucky.com, Kentucky Retirement Systems, which manages about $13 billion in retirement funds investments and benefits for over 337,000 government employees, invested $100 million in Darien-based Arrowhawk Capital Partners, with offices at 1120 Post Road, over the past several years.

The hedge fund recently announced that it could not raise enough money from investors to succeed, according to the report, however KRS, which made its investments in the fund using a New York-based placement agent, hopes to get all of its money back.

According to the report, state officials were reluctant to continue investing in the fund after they learned that the placement agent had in 2010 collected more than $6 million in fees for brokering the transactions.

Some Kentucky lawmakers have proposed banning the use of placement agents in public pension investments, according to the report.

Meanwhile Arrowhawk partner Jennifer Fan is reportedly gearing up to launch another hedge fund, Arbalet Capital LLC, on April 1, with at least $500 million, according to a report on Bloomberg News.