Wednesday, 29 June 2016
Last updated 10 hours ago
Jul 25 2013 | 9:57am ET
JPMorgan Chase is one of the biggest hedge fund managers in the world, managing billions for pension funds. But its own pension isn't sure the asset class is worth the risk anymore.
J.P. Morgan Retirement plans to liquidate its entire $2.3 billion hedge fund portfolio, which accounts for about 18% of its $13 billion in assets. The bank's pension is able to make the risk-cutting move—it will also pull back from equities—because it is that rarest of things: an overfunded pension system, with enough money to cover 117% of its obligations.
Eliminating hedge funds will "immunize" the pension from the vagaries of the market, a source told Hedge Fund Alert.
JPM Retirement's hedge fund portfolio includes about 30 managers. The pension's decision to eliminate them also calls into question the future of its hedge-fund management team, led by Renee Kelly.