San Diego Pension Told Hedge Funds 'Just A Compensation Scheme'

Feb 25 2013 | 11:52am ET

A California public pension fund could do just as well with index funds as hedge funds, its consultant advises.

Salient Partners, whose Lee Partridge serves as chief investment officer for the San Diego County Employees Retirement Association, recommended that the pension ditch some of its hedge funds for passive index funds.

"A lot of hedge funds in general are just a compensation scheme," Salient quantitative expert Roberto Croce told SDCERA during the education session.

"It's really the fees," he added. "Fees, fees, fees. Fees have a very high Sharpe ratio: They are guaranteed. They are not going to miss any charges. Really, what we want to demonstrate here is that a very simple, plain vanilla implementation has a relatively large margin."


In Depth

Q&A: TCA Fund Management's Bob Press on Small-Cap Private Equity

Aug 25 2016 | 8:55pm ET

The emergence of private credit as a replacement for traditional bank financing...

Lifestyle

Kiawah: Island Reversal

Aug 24 2016 | 9:59pm ET

Looking for real estate investments but the typical real estate fare isn’t cutting...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...