The $3.3 billion CareSuper is winding down its allocation to the Warakirri hedge fund-of-funds (hedge FoF) and investing the capital in global equities.

The fund began redeeming its $50 million investment with Warakirri earlier in the year and has been using the returned capital to gradually fund a global equities mandate awarded to Pzena Investment Management in late 2008, according to Greg Nolan, general manager of investments at CareSuper.

Other superannuation funds that have redeemed mandates with the Warakirri hedge FoF are Media Super, TWUSUPER and the NSW Local Government Superannuation Scheme.

The Warakirri hedge FoF, which employs Chicago-based Mesirow Advanced Strategies as underlying manager, surprised clients when it ran without a currency hedge for two weeks between October and November 2008 when the Australian dollar fell precipitously in value compared to the greenback.

Meanwhile, Credit Suisse held preliminary talks with Mesirow to buy the US$11 billion hedge fund business earlier in the month, according to US media reports.

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