Corporate Governance

NYC Pensions May Join in Hedge Fund Trend

By Anthony F. Maul

The pension funds for New York City firefighters, police and civil employees are currently contemplating investments in hedge funds for the first time.  To that end, the city comptroller has recently sought out proposals from hedge fund consultants, which he will be receiving through August 9th.  Should the city funds decide to open their portfolios to hedge fund investments, they would be joining a larger trend that has pension funds increasingly putting their money into alternative investments.  For example, the California State Teachers? Retirement System (?CalSTRS?) has credited its recent bump in returns to a shift of its assets towards alternative investments, including hedge funds.  Similarly New Jersey?s state pension fund has recently considered expanding the percentage of assets it allocates to alternatives, especially hedge funds.

The NYC funds? consideration of hedge funds also occurs at a time when hedge funds are facing a shifting regulatory environment.  Most prominently, the Dodd-Frank Financial Reform Bill enacted last week requires hedge fund advisers to, depending on the size of their funds, register with either the SEC or their home state regulators.  The interplay of these new regulations with pensions? increased participation in hedge funds  is sure to be an interesting area to watch in the coming months.

Full post as published by PomTalk on July 28, 2010 (boomark / email).