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Large Pension Funds Slowly Begin to Dump Hedge Funds

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hedge fund investingA growing number of large public pensions are beginning to shun hedge funds. This trend gained steam in 2014. From equity-focused hedge funds levying high fees, only to fumble a historic rally in stocks – a number of hedge funds are facing permanent redemptions from public funds. Board members of the US$ 17 billion San Francisco Employees’ Retirement System (SFERS) had a contentious and vocal debate on whether to augment hedge fund allocation. SFERS board member Herb Meiberger asked investment guru Warren Buffett on advice on whether to invest in a hedge fund. Warren Buffett wrote back in a handwritten note, “I would not go with hedge funds—would prefer index funds.” Buffett underline the word “not.” Hedge funds became Meiberger’s bête noire.

Another hedge fund that suffered client defections is London-based Capula Investment Management LLP which was founded by J.P. Morgan Chase & Co veteran trader Yan Huo.

Large European Pension Drops Hedge Funds

In 2014, the California Public Employees’ Retirement System (CalPERS) made the decision to pull the plug on its hedge fund program. Another major institutional investor is dumping hedge funds. Netherlands-based Pensioenfonds Zorg en Welzijn (PFZW), one of Europe’s largest pensions, all but eradicated its allocation to hedge funds. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Altitude Infrastructure Gets Financing on Haute-Garonne Network Project

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Altitude Infrastructure SAS inked a 25-year concession agreement and closed a debt financing package for the deployment and maintenance of an ultra-high-speed broadband network in Haute-Garonne. Haute-Garonne is a department in the south of France.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Guggenheim Partners Agrees to Acquire Millstein & Co.

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On July 11, 2018, Guggenheim Partners inked a deal to acquire New York-based Millstein & Co., L.P., an advisory firm formed by Jim Millstein. Millstein will become co-Chairman of Guggenheim’s securities business. Millstein & Co. will become part of Guggenheim Securities, the investment banking division of the company. Ronen Bojmel will lead the combined Guggenheim restructuring team.

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GIC Holds Steady, Maintains Cautious Investment Stance

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Singapore’s GIC Private Limited returned a 5-year return of 6.6% ended March 31, 2018. At March 2018, GIC had increased cash and nominal bonds up 2% to 37% of the total portfolio, while lowering exposure to developed market equities from 27% to 23%.

GIC CEO Lim Chow Kiat commented in his annual letter in the FY 2017-2018 report that, “In view of the high asset valuations, the increased risk of monetary policy tightening across different jurisdictions and the elevated uncertainty, we maintain a cautious investment stance. Nevertheless, we remain ready to take advantage of potential dislocations. The jump in market volatility experienced in early 2018 offered an indication of potentially bigger market turbulence and opportunities in the future.”

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