The California Public Employees’ Retirement System insists that it’s not firing all of its hedge funds because they aren’t worth the 2%, let alone the 20%. But its fellow pension funds, none of whom are CalPERS in terms of size or in-house capabilities, noticed a very clear nod-and-wink in their direction. And so, having followed the herd into alternatives, they’re now forming a new herd to abandon them.
Pension-fund managers across the U.S. are rethinking their investments in hedge funds in the wake of a retreat by the California Public Employees’ Retirement System….
So far, those talks haven’t led to widespread exits. But the concerns offer evidence that public pension funds are reconsidering their decadelong pursuit of hedge funds as an alternative way of boosting long-term returns and closing funding gaps.