Progress report
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Against the backdrop of difficult market conditions and growing investor…
16/11/2011
News that CalPERS is likely to increase – or, at the very least, maintain – hedge fund investments next year bodes well for the industry’s prospects in 2012. Like other institutional investors, the $228.6bn US pension giant is holding steady in its commitment to hedge funds, despite turbulent markets and flailing performance. Why? Because while it is true that hedge funds have underperformed this year, other return-seeking assets, the main culprit being equities, have done a good deal worse.
This remains a common theme. “Our clients have continued to allocate to hedge funds and the number of allocations from both new and existing clients continues to grow”, says Guy Saintfiet, UK head of liquid alternatives at Aon Hewitt. “Trustees have been reminded again by the markets how important it is to diversify their portfolios and this is where allocations to hedge funds come in.”
This is certainly the case for CalPERS, which is charged with the tall order of meeting a 7.75% target by the end of the year. As Wayne Davis, spokesperson for the pension fund, explains: “our hedge funds programme proved its value over the past few months of market volatility, declining only 2.8% during the third quarter, versus an 18% decline for public equities. That speaks to the role it plays in the overall CalPERS portfolio”.
It seems that, with returns targets to reach and, in many cases, deficits to try and address, pragmatism under pressure looks to be the way forward for pensions, both in the US and the UK. This strain of realism, despite the sector’s sub-par year, should continue to benefit managers into 2012.
07/06/2012
Join us and our panel of experts for HFMWeek's Subscribers' Club June's UK breakfast briefing, 'Impact…
31/05/2012
The next US HFMWeek Subscribers' Club breakfast, will take place on Thursday May 31. Join us and…
02/02/2011
HFMWeek's European Hedge Fund Services Awards are designed to recognise companies that have outperformed...
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