Australian Pension Dumps Hedge Funds

Mar 7 2013 | 12:19am ET

Another institutional investor is quitting funds of hedge funds.

CareSuper, an Australian superannuation fund, will redeem it’s A$100 million from Fauchier Partners. The move will leave the A$7 billion pension manager with no hedge fund exposure at all.

The move is designed to save CareSuper on fees and to come into compliance with new Australian superannuation regulations.

"Hedge funds have not met our expectations and they are expensive," Greg Nolan, chief investment officer, told The Australian Financial Review. "Those two factors combined have led our board to decide to terminate the hedge fund managers we have."

CareSuper plans to replace its hedge funds with absolute-return managers offering lower fees, better liquidity and more transparency.

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