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

Fitch Says Alternative Asset Managers 'Stable' Despite Dry Powder

Nov 20 2014 | 9:30am ET

Ratings agency Fitch says the outlook for seven publicly traded alternative asset...

Lifestyle

Cohen Buys $101 Million Sculpture

Nov 12 2014 | 9:17am ET

Steven Cohen was the sole bidder for a rare Alberto Giacometti sculpture at Sotheby...

Guest Contributor

Why The Big Money Is Going To Europe

Nov 14 2014 | 6:03am ET

Peer-to-peer lending was invented with the individual investor in mind. But despite...

 

Sponsored Content

    For Hedge Funds, Mastering Data Is Key To Success

    Nov 4 2014 | 9:45am ET

    Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…

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

November 2014 Cover

Building a better market

Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...

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.