Fresno Boosts Hedge Fund, Private Equity Commitments

Aug 14 2008 | 10:22am ET

Big changes are underway for the Fresno County (Calif.) Employees Retirement Association. The $2.7 billion pension plan has reportedly approved new allocations to hedge funds and private equity funds in hopes of boosting its portfolio’s returns.

According to published reports, the plan’s board allocated 8.7% to hedge funds and boosted its p.e. commitment to 7.1% from 6%. The new allocations are based on an asset-liability study from consultant Wurts & Associates.

“Recent hedge fund performance illustrates correlations to equities has been rising,” according to the study. “Hedge funds performance is lagging a T-Bills +5% benchmark. Given trends in the hedge fund industry, we conclude that 3.5% spread over cash is a reasonable conservative estimation of returns for hedge fund of funds, resulting in forecasted return of 7.5%.”

The study also forecasts a return of 10.7% for private equity over the next 10 years stating, “We expect private equity returns to revert to their historical average of approximately 2.5% over public markets.”


In Depth

Royalties: The Alternative Assets of the Music Industry

Jul 8 2016 | 7:01pm ET

Recent market volatility has investors seeking greater insight into alternative...

Lifestyle

Vortic: Making Great American Watches Again

Jul 25 2016 | 6:29pm ET

If you are compelled by stories of entrepreneurial vision & drive, or simply...

Guest Contributor

MPI: Like Stellar Returns? Better Understand the Risks First

Jul 22 2016 | 8:44pm ET

When the press reports extraordinarily strong relative or risk-adjusted returns...