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Komfie Manalo, Opalesque Asia:

Hit by a 3% decline in its hedge funds exposure, the New Jersey Investment Council on Wednesday said it would cut its $9.1bn hedge funds investment by half, becoming the latest large institutional investor to make similar moves following New York and California in protest of high fees and poor returns.

In a unanimous vote, the council said it would reduce its hedge fund allocations by 52% for the fiscal year 2017 amidst loud calls from labor unions. New Jersey currently invests 12.5% of its funds to hedge fund managers, but this will be reduced to 6%, reported Bloomberg. As of May 31, the pension system had a market value of $71.9bn.

The report quoted New Jersey council Chairman Tom Byrne as saying during a meeting in Trenton, "It sends a message to the hedge fund community that the world has changed. Public funds aren’t going to just pay whatever fees they are charging."

The New Jersey pension’s exposure in hedge funds lost about 3% this year through May 31. Hedge funds typically charge 2% management fee and 20% of profits. However, the entire pension fund reported a 1.6% profits so far in 2016 from all its investments.

The pension’s move comes after New York City’s pension for civil employees announced in April this year it would exit its $1.5bn exposure in hedge funds, and the decision of th......................

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