A sample of eight large U.S. public pension funds shows that managers are making savvy decisions when it comes to investing in hedge funds.
These plans have between $1.2 billion and $5.5 billion in hedge fund assets and have experienced average returns of 11% in the past year — much better than the performance of most hedge fund indexes — according to a recent Pensions & Investments report.
The Pennsylvania Public School Employees’ Retirement System saw its $5.1-billion hedge fund portfolio post a return of 15.6% in the year ending June 30. The New Jersey Division of Investments’ hedge funds rose 13.9% over the same period.
The Missouri State Employees’ Retirement Systems’ hedge funds were up 12.6%, those of the California Public Employees’ Retirement System rose 9.8%, and the Texas Teacher Retirement System’s, 7.7%.
The performance of the eight large pension plan hedge portfolios was far superior to the 9.1% return of the Hedge Fund Research Inc.(HRFI) Composite Index, which tracks single and multi-strategy hedge funds, and the 4.7% return of the HFRI Fund of Funds Weighted Composite Index, which tracks hedge funds of funds.
