Cuomo Nixes Higher Hedge Fund Allocations By Pensions

Dec 18 2014 | 1:39pm ET

Citing increased risks and higher fees, New York Governor Andrew Cuomo vetoed a bill that would have allowed state pension funds to up their hedge fund allocations.

The bill he killed would have increased the cap on such investments to 30% from 25% for New York City's five retirement plans, the fund for state and local workers outside the city and the teacher's pension.

The increase could have meant a nice additional chunk of change for hedge fund managers: New York's combined pension funds manage $445 billion.

“The existing statutory limits on the investment of public pension funds are carefully designed to achieve the appropriate balance between promoting growth and limiting risk,” Cuomo said in a message attached to the veto. “This bill would undermine that balance by potentially exposing hard-earned pension savings to the increased risk and higher fees frequently associated with the class of investment assets permissible under this bill.”

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