Mass. Sticks With Funds Of Funds, Private Equity

Apr 8 2008 | 2:00am ET

The Massachusetts Pension Reserve Investment Trust is sticking with funds of hedge funds and private equity, in spite of criticisms of both alternative asset classes.

Michael Travaglini, executive director of the $52 billion pension fund, says he is satisfied with funds of funds and is not prepared to build the infrastructure necessary to directly invest in single-manager funds.

“I’ll pay the double layer of fees,” Travaglini told the Reuters Hedge Fund and Private Equity Summit in New York. “If we tried to do it alone, we would have to pay a lot more in costs for lawyers and due diligence and even the experts on the staff who would have enough experience to select the funds. If I took that in-house, I’m not sure the hedge funds we would select would be different or better.”

Travaglini, who led the pension into its first hedge fund allocations when he joined it four years ago, added that he is pleased with the returns produced by the funds of funds he employs—Massachusetts’ hedge fund investments returned 11.9% last year—despite losses in the high-profile collapses of Amaranth Advisors and Sowood Capital Management.

“Even with the blow-ups, we’ve exceeded the performance expectations,” he said.

Travaglini also had kind words for private equity in spite of the parched credit markets, calling them “the only place where we can get a pop.”

“Even if returns aren’t what they were historically… we still think they’re attractive enough for us as a plan,” he said.

Massachusetts has a 10% allocation to p.e., although only 7% of its assets are currently in the asset class.


In Depth

Fundraising for Mid-Sized PE Funds: Should You Use a Registered B/D?

Dec 6 2016 | 7:18pm ET

When does a fund sponsor need to use a registered broker/dealer when raising capital...

Lifestyle

Trump Attends 'Villains and Heroes' Costume Party Dressed As...Himself

Dec 5 2016 | 11:16pm ET

U.S. President-elect Donald Trump attended a "Villains and Heroes" costume party...

Guest Contributor

Nowhere to Hide: Why the Future of Asset Management Depends on Innovation

Nov 15 2016 | 6:55pm ET

Information technology has reshaped the asset management industry’s periphery,...

 

From the current issue of

Since the inception of Modern Trader, a core editorial theme has centered on the wisdom and power of crowds. Editorial emphasis has focused on companies and projects engaged in the collection and analysis of information. 

AVAILABLE NOW at BARNES & NOBLE

NEWSTAND LOCATOR