Tags: San Francisco | pension | hedge | funds

WSJ: San Francisco Pension Fund Might Nuke Plan to Invest in Hedge Funds

By    |   Wednesday, 03 December 2014 02:48 PM

Hedge funds don't seem to be doing real well in their marketing efforts to California public pension funds.

In September, Calpers (the California Public Employees' Retirement System), the country's largest public pension fund, announced it was dumping its $4 billion of hedge fund assets in light of high fees and mediocre returns.

And now Victor Makras, chairman of the San Francisco Employees' Retirement System pension fund, is suggesting that the fund invest zero to 3 percent of its portfolio in hedge funds, down from the fund staff's prior proposal of 15 percent, according to a memo obtained by The Wall Street Journal.

The San Francisco Employees' Retirement System now has nothing invested in hedge funds. The system's board was expected to discuss the scaled-down proposals Wednesday, according to the paper.

Approximately 50 percent of U.S. public pension funds have a hedge fund exposure, according to research firm Preqin. Many retirement systems have turned to alternative investments in recent years to juice their returns and diversify their holdings.

Henry Blodget, editor-in-chief of Business Insider, is none too impressed with the performance of hedge funds.

"On average, hedge funds are no smarter about picking stocks or other investments than anyone else. In fact, they're decidedly, startlingly worse," he writes on the news service.

"But hedge funds are absolutely brilliant moneymaking opportunities for those who run and work for them," thanks to their high fees.

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Hedge funds don't seem to be doing real well in their marketing efforts to California public pension funds.
San Francisco, pension, hedge, funds
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2014-48-03
Wednesday, 03 December 2014 02:48 PM
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