Tuesday, 23 September 2014
Last updated 2 hours ago
Jun 25 2012 | 1:31pm ET
Illinois' prepaid college tuition savings plan is scaling back its effort to catch up from a massive shortfall—an effort that relied heavily on hedge funds.
The Illinois Student Assistance Commission is expected to vote today to slash the College Illinois program's alternative investments exposure by almost half. The move isn't unexpected: ISAC ousted its chief investment officer, Andrew Davis, a year ago after a Crain's Chicago Business report revealed that the College program's assets had been shifted heavily into hedge funds, private equity and real-estate investments.
Indeed, trying to make up for a 30% funding shortfall, ISAC had poured 47% of the $1 billion College fund into alternatives. Under new CIO Kent Custer's plan, that total will fall to 27%.
Among the casualties of the new plan, and of Davis' exit, is a small Chicago hedge fund run by Davis' friend, Joseph Reynoso. ISAC plans to yank half of its $20 million investment in Reynoso's fund. The $20 million represents half of Reynoso's total assets.
"It's a smaller fund," Custer said of Reynoso's fund. "You don't want to represent [most of] the assets of any fund."
Callan Associates assisted in the ISAC plan with an asset-allocation study. Much of the hedge fund cut will benefit the College fund's stock portfolio, which will rise from 23% to 48%.
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitich, CIO of Petty Endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
Aug 25 2014 | 11:21am ET
As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…
Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.