Hedge Funds Don't Belong in Pension Funds

More and more pension funds are recognizing that hedge funds are high risk and high cost and the return does not justify either. Many large public pension funds are divesting themselves of hedge funds. Hedge Funds performance subpar

The Texas Municipal Retirement System (TMRS) is currently invested 10.1% in hedge funds and increasing allocations in Private Equity and Real Return asset classes, which are also higher risk. Here are the returns for the last year for the asset classes.

It is clear that Absolute Return, another name for Hedge Funds, is a drag on overall investment performance. Remember, the overall return for TMRS must be 6.75% annually in order to meet their pension payment obligations.