New York City's largest public pension is exiting all hedge fund
investments in the latest sign that the $4 trillion public pension
sector is losing patience with these often secretive portfolios at a
time of poor performance and high fees.
The board of the New York City Employees
Retirement System voted to leave blue chip firms such as Brevan Howard
and D.E. Shaw after their consultants said they can reach their targeted
investment returns with less risky funds.
The move by the fund, which had $51.2 billion in
assets as of Jan. 31, follows a similar action by the California Public
Employees' Retirement System (Calpers), the nation's largest public
pension fund, and public pensions in Illinois.
"Hedges have underperformed, costing us
millions," New York City's Public Advocate Letitia James told board
members in prepared remarks. "Let them sell their summer homes and jets,
and return those fees to their investors."
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