Salient to Investors:

  • Ted Eliopoulos at Calpers said their small hedge fund allocation did not effectively diversify or hedge any meaningful portion of their total portfolio and their decision to divest the entire allocation was unrelated to its performance.
  • Keith Brainard at National Assn of State Retirement Administrators said Calpers is often a trend setter among pension funds on investment strategies, though many public pension funds consider hedge funds to be a vital part of their diversified portfolios.
  • Calpers’ annualized rate of return on its hedge fund investments over the last 10 years is 4.8% versus its fund return goal of 7.5%
  • McKinsey said that assets in alternative investments such as hedge funds, real estate and private equity may double by 2020.

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