Maybe the Start of a Trend
The nation’s largest pension fund has announced that it will be liquidating its positions in 24 hedge funds and 6 hedge fund-of-funds. CalPERS, Nation’s Biggest Pension Fund, to End Hedge Fund Investments reported in today’s New York Times.
Possibly someone read my recent blog post, Hedge Funds: Prudent Investments?
There is little complicated about this decision. It comes down to fees, risks, and returns.
Not surprisingly, a professional with a hedge fund advisory firm explains, “Hedge Funds are the place to be now because people are expecting a major correction.”
Really? That’s the rationale?
Getting tickets to a Beyonce concert can be justified because it is “the place to be.” I would suggest that fiduciary decisions to invest plan assets in any asset class would be based on something more than it being “the place to be.”
It bears watching whether plan sponsors begin liquidating positions out of hedge funds. But, I could be wrong, maybe hedge funds will continue to be the “in” asset class of choice into the future.