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Komfie Manalo, Opalesque Asia: The $55bn New York City Employees’ Retirement System on Thursday voted
to pull out its $1.5bn allocations into hedge funds and is also mulling
doing the same with its $8bn investments in private equity, reported the
New York Post.
In a unanimous vote, New York City’s public employee pension, which
manages the money of some 350,000 municipal employees, said the pension
fund is withdrawing its investments in hedge funds, including D.E. Shaw,
Perry Capital and Brevan Howard. The pension fund earned 3.9% from its
hedge fund portfolios after paying nearly $40m in the fiscal year ended
June 30, 2015.
However, the figure is below the 7% target annual return, the pension
said. "They have severely underperformed," City Advocate and pension
fund trustee Letitia James told the Post.
She added that the hedge funds failed to provide them protection during
a down market as was promised them and also failed to justify the high
fees they charge.
A day before voting, the pension system said it was weighing exiting its of hedge fund investments
because of lagging performance, high fees and the riskiness of the asset
class. Hedge funds make up 3% of the civil employees’ fund’s $55bn ...................... To view our full article Click here
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