San Fran. Pension Postpones Hedge Fund Decision

Jun 13 2014 | 8:51am ET

The San Francisco City & County Employees’ Retirement System is going to take its time before taking the plunge into hedge funds.

The $20 billion public pension fund’s board this week voted to table a planned 12% allocation to alternative investments plus a $3 billion allocation to hedge funds for 90 days, giving it more time to consider its first foray into the asset class. The board also put the brakes on plans to issue a request for proposals from hedge fund consultants.

The alts. plan has been championed by system chief investment officer William Coaker, who has said it would reduce risk. But board member Herb Meiberger has vocally opposed it, winning support from Berkshire Hathaway chief Warren Buffett, who urged the pension to use index funds rather than hedge funds.

Despite the delay, it isn’t clear that Coaker’s plan is in any real jeopardy: Meiberger alone voted against tabling the proposal, hoping to kill it immediately, and only two of the seven board members have said they are opposed to investing in hedge funds.

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