Hopefully this is a sign of a more reality-based investing strategy, taking hold in 'Retirement Security' business.
Calpers, Nation’s Biggest Pension Fund, to End Hedge Fund Investments
by Alexandra Stevenson and Michael Corkery, nytimes.com -- Sep 15, 2014
The California Public Employees’ Retirement System, the nation’s largest pension fund, will eliminate all of its hedge fund investments over the next year on concerns that investments are too complicated and expensive.
The pension fund, which oversees $300 billion, said on Monday that it would liquidate its positions in 24 hedge funds and six hedge fund-of-funds — investments that total $4 billion and more than 1 percent of its total investments under management.
The decision, after months of deliberation by the pension fund’s investment committee, comes as public pensions across the United States are beginning to assess their exposure to hedge funds. It is likely to reverberate across the investment community in the United States, where large investment funds look to Calpers as a model because of its size and the sophistication of its investments.
[...]
Hedging
their our bets on more long-term investments, is a strategy that can stand the test of time. Hedge fund get-rich-quick betting, not so much. Not so great for the economy either, when you re-count those Hedge Funds that that "earned" Billions --
by "betting on" our Mortgage Markets
crumbling (ie. massively "shorting" them --
betting against the future ...
our future.)
That's what Hedge Funds DO -- assuming they can make a quick-million-bucks. They damn the social consequences, and usually their fair share of taxes too.
Well, California Public Employees’ Retirement System pension fund managers have apparently had enough of this high-stake casino, otherwise known as Hedge Funds.
They are divesting from them. Smart move.
Calpers to Exit Hedge Funds, Divest $4 Billion Stake
by Michael B. Marois, bloomberg.com -- Sep 15, 2014
[...]
The largest U.S. pension is getting out of hedge funds even as other large public plans such as New Jersey’s add to the private portfolios. Calpers has been working to reduce risk after the global financial crisis wiped out more than a third of its wealth, forcing it to increase contributions from taxpayers to cover losses. Calpers first invested in hedge funds in 2002 to help meet target returns to cover the growing cost of government retiree benefits.
Fund Fees
The pension fund paid $135 million in fees in the fiscal year that ended June 30 for hedge fund investments that earned 7.1 percent, contributing 0.4 percent to its total return, according to Calpers figures.
[...]
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.
[...]
May other employee-based Pension Funds be quick to catch on this long-run horizon investing trend, that Calpers is forging.
Because afterall, Casinos are for Chumps ... and the financially desperate. Dumb moves, in either case; if you care at all about your financial future, and that of your fellow-employees.