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

FINtech Focus: Fundbase Aims To Revolutionize Access To Hedge Funds

Jan 23 2015 | 11:03am ET

Global investment in financial technology—also known as fintech—is booming....

Lifestyle

Looking For A Hedge Fund Manager? Try Davos

Jan 28 2015 | 8:48am ET

Davos, Switzerland seems to have become the hedge fund capital of the world—at...

Guest Contributor

From Switzerland With Love: Some Hard Truths About Central Banks And Risk

Jan 23 2015 | 7:54am ET

In the wake of the Swiss National Bank uncoupling the country’s currency from...

 

Editor's Note