Sept 28 Rhode Island's state pension fund on
Wednesday said it will cut its investments in hedge funds by
more than $500 million over the next two years as part of a new
investment plan favoring more traditional strategies for better
Rhode Island's decision comes after New Jersey's state
pension fund announced in August that it would slash its hedge
fund investments by half.
Under the "Back to Basics" plan, Rhode Island's pension fund
will reallocate funds to more traditional asset classes, the
State Investment Commission said in a statement. (bit.ly/2dbc9Pj)
A majority of investments will be put in low-fee index funds
and in other assets designed to protect against market risks
such as inflation and volatility.
"Our 'Back to Basics' approach will improve returns through
common sense investments that have proven they can deliver
growth and stability," state Treasurer Seth Magaziner said in a
To date in 2016, the pension fund said it has earned about
$334 million in investment gains and contributions.
In March, Reuters reported that Rhode Island's pension fund
voted unanimously to exit Luxor Capital after influential
industry consultant Cliffwater recommended the removal of its
money from the hedge fund.
Luxor was not the only loser for Rhode Island last year. The
Indus Asia Pacific Fund lost 35.8 percent and the Brigade
Leveraged Capital Structures Fund fell 10.3 percent, data from
the state showed.
In 2014, the California Public Employees' Retirement System
became the first prominent public pension fund to forgo its
hedge fund investments after finding them too costly and
(Reporting by Vishal Sridhar in Bengaluru; Editing by Leslie