U.S. Public Funds Split on Absolute Return Programs

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.


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

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Contact the writer or creator of this article or page.
Questions or comments: support(at)swfinstitute(dot)org
Follow on Twitter at @swfinstitute and @sovereignfunds
Learn, Attend and Network: Institutional Investor Events and Summits
Go Back: HOME: Sovereign Wealth Fund Institute

institutional investor investment mandates