California Public Employees’ Retirement System and the New York City Employees Retirement System, both public pension fund managers have decided to divest their portfolios of hedge funds.
Fees are big; 2% of assets plus most commonly, for the lucky ones, and 20% of profits. If these profits aren’t substantial, it’s a prescription for investor frustration.
Hedge funds have delivered hope, lousy returns, and high fees. A toxic mix.
An excellent review can be found at Wolf Street.
Georgetown and the Texas Municipal Retirement System can learn from the large pension funds by following their lead in getting rid of hedge funds.
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