Wednesday, 20 June 2007 08:00
The board of the California Public Employees Retirement System (CalPERS) announced Tuesday June 19, 2007 that it would double the amount of money its managers can invest in hedge funds from $5 billion to $10 billion. Approved investments will include both developed and emerging market funds.
This is in response to the solid performance of these funds in recent years and the need to capitalize on excellent market opportunities, said Rob Feckner, CalPERS board president. Corporate governance and hedge funds also help us to reduce risk since they are less affected by market swings than many other investment strategies.
CalPERS Senior Investment Officer Christy Wood stated that the pension funds attraction to hedge funds was based in large part on the ability of hedge funds to produce equity like returns with bond like risk and described hedge funds as significant alpha generators for the plan.
CalPERS began investing in hedge funds in April 2002 with the goal of diversifying its investment portfolio, managing risk, and adding value to the fund. CalPERS overall portfolio is currently valued at some $245 billion.