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Breakingviews: Going hedge-fund free

Tuesday, 16 Sep, 2014 - 02:53

Jeff Goldfarb and Richard Beales discuss the reasons why California's $300 billion pension fund, Calpers, is ditching all $4 bln of its hedge fund investments.

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We've all become accustomed to the scale model about what some call the Sacramento model maybe. California is big pension scheme has decided to pull out of hedge funds. Richard why. Well I think. Two big reasons one is the one that kind of mostly talking about is that they had full billion dollars and its vote that says like that law but the -- biggest pension fund and got three who has written but it says that if then -- small percentage and even this sort of -- management theories was that he probably need to get big effort to make big difference but anything they do. Sort of -- it could gets gets attention right that is -- -- into just just the other issue is probably attend those costs. -- trophies you know you. He you can legitimately say invests in Edmonton and care about the -- is -- network to begin parts of the fees kind of and humanity and extended an Edmonton is good enough but. -- was vessels that but it's costly public had they care about governance and so sort of defeats the huge convention attendance. And that -- and it hasn't you know been great 7% in the years to -- that -- -- lower. He's a -- ID. And I think they would just they just weren't convinced enough but hedge -- is well worth it. To get them big enough and netbook you know some people say you want 1520%. -- -- and much much more centrist. And another one gonna get I guess they vote vote would have gotten it took about a decade ago all partner and it's all been there's been huge push towards alternative right. And I mean they're sticking with us some alternatives well it'll say if you look at performance private equity groups and 20% in the same idiots did. So it's kind of if you can try to get with a combination different events and some say flirt so. Just a look at some other things and you're trying to get it to seven and up the -- which is felt the target. Then you need if you. Areas that even if you and -- have a relatively small proportion in the public private equity big president will make a difference today is that hedge fund community I mean you know we talk about this number is relatively small certainly. The -- calpers also on the scale of the entire hedge fund universe which has grown. Rebuild but our hedge fund community going to be a little bit worried about I would think so maybe not necessarily just because of help as the because anything calpers does is very public. And you know small pension funds that of -- and disposal of the US will have to be thinking the trustees will now have to beefing indicate was health system that. -- -- -- -- And have to be pretty confident pension public and can go and get in front of its. In its retirees it's -- its board members like kind of things -- yet we've we've we've still wanna be right aren't old enough on your story to watch and we'll be back with more breaking news tomorrow.

Breakingviews: Going hedge-fund free

Tuesday, 16 Sep, 2014 - 02:53

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