Ill. Universities Pension Rejects Hedge Funds

Jun 15 2011 | 2:25am ET

While many institutional investors are rushing to add hedge funds to their portfolio, the Illinois State Universities Retirement System is taking a decidedly wait-and-see approach.

The $14.7 billion pension has unveiled a new asset allocation plan whose most conspicuous feature is the absence of any hedge fund target at all. The exclusion comes in spite of an April 22 decision to consider hedge funds and other absolute return strategies for the new asset allocation.

Daniel Aiken, the plan's chief investment officer, told Pensions & Investments that SURS would look further into absolute return investments before taking the plunge. But the new asset allocation halves SURS' space for experimentation, its opportunity portfolio, from 2% to 1%.

SURS also decided against an increase in private equity investments, leaving that asset class's target at 6%.


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