Saturday, 20 September 2014
Last updated 1 day ago
Aug 20 2012 | 11:57am ET
Massachusetts' state public pension system has moved more than half its hedge fund portfolio from funds of hedge funds to direct investments, and isn't looking back.
The $48.8 billion Massachusetts Pension Reserves Investment Management board has no second thoughts about its decision last year to all-but do away with funds of funds. "We were paying an extra 84 basis points over standard direct management fees on our funds-of-funds investments," Steven Grossman, Massachusetts state treasurer, told aiCIO. "On $5 billion, that's $36 million. We haven't been particularly happy with our returns on those investments. And with funds of funds, they do the due diligence, and we're simply more comfortable doing it ourselves."
So far, Grossman says, about 60% of MassPRIM's hedge fund portfolio consists of direct investments. "It's going well," he said. "We're steadily moving funds. Certain assets we can get at right away, others we have to wait."
And, he adds, "all indications so far say it was the right thing to do."
"You might as well own directly, get close to the source, keep due diligence internal, and save $36 million," he told aiCIO. "We're looking forward to cutting out the middle man and working closely with a group of 20 or so hedge funds that we've selected ourselves."
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.