23/07/2008

Pensions still pining for hedge funds

KAPILA GOHEL: Public pension plans and retirement systems in the US are still in favour of investing in hedge funds despite the credit crunch, according to a new survey by HFMWeek (see pages 16-18).

The HFMWeek US Public Pension Funds Survey found that 50% of participants had already invested in hedge funds. And of the remaining half that didn’t, a substantial 71% were exploring hedge funds as an investment avenue.†

The Florida Retirement System Pension Plan, the fourth largest public pension in the US with around $122bn †in assets, is one of the pensions looking into the asset class for a possible future investment. “We are in the very early stages of a work plan that includes a study of hedge funds as a strategy for getting multi-asset class exposure in strategic investments,” said a source at the Florida State Board of Administration (SBA), a constitutional entity of Florid †a state government, which manages 34 investment funds, including the state pension.†

The pension fund, which took part in our survey, stated that the current credit crisis had not had an effect on their decision to look into hedge funds. In fact 50% of the participants concurred with Florida’s view. Meanwhile, 41% of the half of US public pensions that †have existing hedge fund investments said they would slightly increase their allocations over †the next three years, a promising sign for the future of the industry.†

Click here to access the full survey.

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