Thursday, 24 July 2014
Last updated 14 hours ago
Aug 3 2011 | 10:50am ET
More and more pensions are investing more and more money in hedge funds, but they could be doing a much, much better job, according to a new study.
While the average U.S. pension fund's hedge fund investments easily bested the broader markets, they badly trail overall hedge fund returns, according to a Financial Times analysis of a report by three finance professors. U.S. pensions' hedge fund investments managed a 1.9% annualized return from 2000 through 2008, a period in which the average hedge fund rose about 5% per year.
Canadian pensions did even worse, with their hedge funds returning only 0.6% per year. That figure is especially galling for Canada, whose stock market managed a 2.9% annualized return over the period.
The poor returns come as an increasing number of pensions crowd the hedge fund space. In the year that the study began, 2000, only 2% of North American pensions invested in hedge funds. By 2008, more than 20% did so.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…