Pensions to put more cash with hedge funds-experts

*Institutional investors to put new money into hedge funds

*Pension funds demand better terms

By Svea Herbst-Bayliss

BEVERLY HILLS, Calif., April 28 (Reuters) - Institutional investors like pension funds will put fresh money into hedge funds this year but they will bargain for more concessions on fees and transparency, industry experts said on Tuesday.

"There will be significant growth in hedge funds and the public pension funds will be leading the charge," Stephen Nesbitt, chief executive officer of Cliffwater LLC, a consulting firm that advises pension funds on hedge fund investments, said at the 2009 Milken Institute Global Conference.

Such forecasts may be welcome news to the badly battered $1.3 trillion hedge fund industry, which reported its worst-ever returns last year.

Investors punished managers who lost an average of 19 percent last year by pulling out a record $152 billion in the fourth quarter of 2008.

Redemptions slowed in the first quarter of 2009 but were still very sizable at $103 billion, data from Hedge Fund Research show.

Looking ahead, experts forecast that pension funds in particular will make fresh commitments in the fourth quarter of 2009. Roughly 40 percent of all public pension funds invested with hedge funds last year, having committed about $78 billion, industry data show.