The largest public pension fund in the US is to increase its investment in hedge funds in order to b...
The largest public pension fund in the US is to increase its investment in hedge funds in order to boost flagging returns.
The $133.8bn California Public Employees' Retirement System's (CalPERS) pension fund will also use the State Street Bank International Fund Services system to improve transparency, accounting, compliance risk monitoring and accurate reporting on it hedge funds programme. CalPERS was hit badly by the technology bubble, seeing its assets drop by 25% over the last two years, similar to those losses sustained by the S&P 500 in 2002.
The pension fund made its first investment in hedge funds in April 2002 and has seen a return of 2.4% on these investments through to 31 December 2002.
Speaking on the expansion of the pension fund's hedge fund investment programme, Robert Carlson, acting board president, said: 'We want to cast a wide net to capture the best of the best. A stable of advisers will give us the flexibility to capture a broad universe of investment styles and strategies, and will provide bench strength for added due diligence, monitoring and management.'
Sean Harrigan, acting chairman of the pension's investment committee, added: 'We are able to offset losses that we would have otherwise sustained in the equity markets. This is a perfect example of diversification paying off.'
CalPERS total hedge fund investment currently stands at around $550m. Its most recent positions include a $25m investment in London-based Lansdowne Partners, a long/short European equity manager, and a $25m investment in Miami, Florida-based Matador Capital Management, a bottom-up US equity hedge fund.
Other investments include $50m in Bain Capital's Brookside Capital Partners, $50m in Andor Capital, and $50m in the Tosca fund.
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