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

Feb 25 2013 | 12:52pm 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: Rotation Capital's Rothfleisch On SPAC 2.0

Aug 11 2017 | 7:43pm ET

Corporate actions have long been a staple of event-driven investors, but activity...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Star Mountain Capital: Private Lending in the Lower Middle-Market

Aug 14 2017 | 4:45pm ET

Private credit has become one of the most popular alternative asset classes in recent...

 

From the current issue of