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U.S. Public Funds Split on Absolute Return Programs

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Once a coveted beat by financial journalists in the 2000s, hedge funds have taken a deep step back, as more U.S. pension funds begin to question the usefulness of hedge fund programs. Hedge funds are facing redemptions everywhere. For example, in 2016, hedge fund titan Richard Perry winded up his hedge fund, Perry Capital, after a 28-year run.

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Some major institutional investor giants such as the California Public Employees’ Retirement System (CalPERS) had decided to shutter hedge funds completely back in 2014. CalPERS was a pioneer in the hedge fund world, being one of the first major institutions to allocate to hedge funds in 2002. Post-2008, CalPERS became disenchanted with its hedge fund portfolio. CalPERS had US$ 4 billion in its Absolute Return Strategies (ARS) program in September 2014. On the other hand, some pension players are still searching for the next best hedge fund. The California State Teachers’ Retirement System (CalSTRS) opted to nix absolute returns, and migrate them toward risk-mitigation strategies (essentially not calling out hedge funds as an asset class, but purely as an investment strategy). CalSTRS has around a 9% allocation to risk mitigation strategies, seeking to hedge against volatile listed equities.

New Mexico State Investment Council Considers Dumping Absolute Return Portfolio

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PSP Investments and Blue Sky Alternative Investments End Strategic Partnership Agreement

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Blue Sky Alternative Investments Limited informed Canada’s Public Sector Pension Investment Board (PSP Investments) that it agreed to terminate its strategic agreement effective March 31, 2019. In December 2017, Blue Sky Alternative Investments forged an agreement with PSP Investments to assist in committing capital in a number of agricultural investments.

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Yield-Hungry Korean Insurance Capital Backs TSX Broadway

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Mirae Asset Daewoo Co., Ltd., the Seoul-based investment banking firm, has provided a US$ 375 million loan for a redevelopment in New York’s Times Square. It joins L & L Holding Company, Maefield Development, and Fortress Investment Group who are bringing the development known as TSX Broadway to life. The building is at 1568 Broadway in Manhattan. TSX Broadway, a US$ 2.5 billion project when all equity financing is added in, will allow for renovations and expansion of the 46-storey building. An LED screen, which is not an uncommon sight in the Big Apple, will wrap around the corner of the tower. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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OFFICIALS: Saudi Crown Prince Denies Interest in Acquiring Manchester United

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The Saudi Arabian government dispelled rumors that Saudi Crown Prince Mohammed bin Salman will acquire football club Manchester United. However, Saudi Arabia’s Public Investment Fund (PIF) had talks regarding sponsorship with the football club. Manchester United signed a partnership deal with Saudi Arabia’s General Sports Authority in 2017.

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