Pension funds’ love affair with hedge funds is cooling off. They yanked a collective $6.4 billion from
hedge funds in October, the third month this year they have pulled out money,
according to a new Trim Tabs/Barclay Hedge report released yesterday.
Although pensions have handed $15.7 billion directly to
hedge funds so far this year, that’s still a far cry from last year’s $78.5
billion and $65.7 billion in 2010.
This year’s retrenchment is a bad omen for hedge funds,
whose asset growth has been bolstered by direct institutional investment from
pension funds in recent years. Since the crash of 2008, these funds — primarily
heavily under-funded state and local government pensions — have bypassed funds
of funds and put their money directly into hedge funds, hoping to goose returns…..
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