Bye-Bye HEDGE FUNDS

America's largest pension fund, the California Public Employees' Retirement System (CalPERS), has made the decision top opt out of hedge funds.

It's reported that CalPERS made the "ditch decision" in respect of about $4 million in hedge fund investments, because managing these funds had become too cumbersome and too expensive.

Despite the controversy surrounding this drastic decision, in all honesty, the performance of hedge funds has more or less taken a downward turn on the stock market.

More on their decision can be found at http://money.cnn.com/2014/09/16/investing/calpers-hedge-fund-exit/index.html

What do you think about CalPERS' decision? Are you in support? Or do you think they could have "waited it out" a little bit more?

 

Investor wrote, "... because managing these funds had become too cumbersome and too expensive." It is amazing that a public pension fund has finally taken that step. The management fees, most funds require a steep payment, may total 2 percentage points. That is a great deal of money over twenty or thirty years of accumulation. Then the fund may only gain 4-7% interest. Since California has made that step, we can all expect our state's public employees systems to divest of hedge funds also.
I am a former state public employee. Our public employees pension took a huge cut in 2008/2009. Many wondered why our funds were invested in the state's municipal bond funds. Those funds are specifically managed by a well know hedge fund. I hope my pension system gets rid of them!

 

Hedge funds are old news as far as I'm concerned. They're not that great, and I can do better on my own. It doesn't surprise me that CalPERS ditched its hedge funds because doing so could benefit everyone involved, including CalPERS itself and the pension owners. We'll see soon enough whether other pension systems get rid of their hedge fund holdings, and I see this trend continuing.