A massive pension system said no to hedge funds. The $298 billion California Public Employees’ Retirement System (Calpers) is quitting hedge funds, saying they’re too expensive and complex for its investment portfolio

A massive pension system said no to hedge funds. The $298 billion California Public Employees’ Retirement System (Calpers) is quitting hedge funds, saying they’re too expensive and complex for its investment portfolio

Hedge funds have amassed a record $2.8 trillion in assets as institutional investors pour money into alternative investments. McKinsey & Co. said last month that assets in alternatives, which also include real estate and private equity, may reach $14.7 trillion by 2020, double the current level.

Unlike traditional money managers, hedge funds can bet on rising as well as falling prices of securities, aiming to make money in any market environment. They generally charge fees of 2%  of assets and 20% of returns, a level of remuneration that some institutions have balked at.

http://www.bloomberg.com/news/2014-09-15/calpers-to-exit-hedge-funds-citing-expenses-complexity.html

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s