Illinois Teacher’s Counters Chicago Tribune’s Jabs

Jan 29 2007 | 2:51pm ET

Jon Bauman, executive director of the $39 billion Teachers' Retirement System of the State of Illinois, last week blasted the Chicago Tribune for distorting the facts surrounding a recent decision by the system to make a “conservative” investment into hedge funds.

An article entitled “Pensions betting on hedge funds,” published Jan. 26, focused on the high-leverage, aggressive hedge funds that carry tremendous investment risks. According to Bauman, there are also different hedge vehicles that the system will consider, which are more conservative hedge products that exhibit less risk than some traditional investments, including stocks.

“Our colleagues at the Illinois Municipal Retirement Fund announced that their initial 2001 $225 million investment in these types of strategies grew to $345 million on Dec. 31 representing a 7.9% annualized return over the last five years,” Bauman wrote in a letter to the Tribune.  

Bauman also criticized the article’s characterization of the system as “mired in…scandal,” a reference to a former Teachers' director who recently pleaded guilty to federal charges receiving kickbacks from firms seeking investment business from the fund. Bauman wrote, “I fear the Tribune is mired in old news. We have moved forward from this sad period in our 67-year history with revamped policies, increased disclosure, and not one penny of TRS assets lost.” 

In addition, Bauman defended the system’s decision to allocate 2.5% of its portfolio to hedge funds stating, “…investing in additional asset classes will further TRS’s efforts to achieve investment returns that are consistent with our actuarial requirements and reduce risk during adverse market environments.”

In its latest fiscal year, the system earned over 12%, ranking the fund in the top 25% of large public pension funds, according to Bauman.

 

 


In Depth

Part II: Roubini Talks Risk, Recovery And The Threat Of A Triple Dip Recession

Oct 21 2014 | 12:41pm ET

In the second half of our interview with Nouriel Roubini, FINalternatives editor...

Lifestyle

Balyasny Pays Over $6M For Lakefront House

Oct 22 2014 | 10:29am ET

A venture headed by hedge fund manager Dmitry Balyasny just paid $6.2 million for...

Guest Contributor

Hedge Funds Weather A Data Management Perfect Storm

Oct 22 2014 | 12:28pm ET

From a regulatory standpoint, nearly every development since the crisis has placed...

 

Videos

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

October 2014 Cover

Deeply flawed risk benchmark

Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.