'..serious doubts about the benefit of hedge funds for big investors with a long-term perspective..'

<blockquote>'Wall Street managers were paid an astounding $708 million in fiscal year 2015 to handle the city’s pension system — but did such a terrible job that taxpayers were forced to cough up $9.9 billion to make up for their shortfalls.

Most of those costs, moreover, were kept secret.

Management fees jumped by $178 million from $530 million the year before. But Comptroller Scott Stringer says the “vast ­majority” of the increase stems from the discovery of previously undisclosed “incentive fees.” '

- Susan Edelman, City’s pension managers paid $708M in 2015, November 8, 2015</blockquote>


'Finally, the teachers’ union report turned up compelling data on how closely hedge funds’ performance mimics that of the overall market..'

<blockquote>'Some data is emerging, though, that raises serious doubts about the benefit of hedge funds for big investors with a long-term perspective. Utah, for example, increased its holdings in hedge funds and private equity in recent years. By 2013, those allocations at the Utah Retirement Systems had reached 40 percent of assets under management, up from 16 percent in 2005.

Have its hedge funds helped the Utah pension’s investment performance? A May 2015 report to the Utah Legislature suggests not. Prepared by the Office of the Legislative Auditor General, the report concluded that if the state’s retirement system had maintained its 2004 allocation with fewer alternative assets and no hedge funds, the pension fund would have gained $1.35 billion in additional assets by 2013.

..

Finally, the teachers’ union report turned up compelling data on how closely hedge funds’ performance mimics that of the overall market. Ten of the 11 pension funds reviewed in the report demonstrated “significant correlation” between the performance of the hedge funds they invested in and the performance of the overall fund. The similar returns occurred even during the 2008 crisis, the study found.'

- Gretchen Morgenson, A Hedge Fund Sales Pitch Casts a Spell on Public Pensions, November 6, 2015</blockquote>


Context

<blockquote>All That Glitter Is Not Gold: An Analysis of U.S. Public Pension Investments in Hedge Funds, 2015

Unmask the Corrupt

Transparency International


'..BIS .. a world in which debt levels are too high..' (2015)