A major announcement was made this week when the California Public Employees’ Retirement System (Calpers) announced it was exiting its hedge fund strategy. Hedge Funds have had a bad few years to say the least, but this most recent move by one of the largest public pension systems is a significant shift in how the industry is likely to be viewed by others going forward.
It’s no secret that the hedge fund world does not gel well with our philosophy of investing in portfolios of institutional mutual funds that provide exposure to broadly diversified investments all over the world at a very low cost. But, this news still came as somewhat of a surprise. What it will mean for the future of the hedge fund industry, which we would concur with one of the articles below is a legal structure, not an asset class, is anyone’s guess. As this is a piece of news that many may have missed or want to better understand, we thought for this week’s guest blog we’d share a few of the articles and posts we’ve come across from a slew of experts that best describe the state of the industry and the impact that Calpers’ decision might have.
The Announcement
Calpers to Exit Hedge Funds (WSJ)
The Reaction
Barry Ritholtz: Calpers’ Hedge Fund Exit Sets off an Earthquake (ThinkAdvisor)
Steve Denning: Why Calpers Tired of Vampire Hedge Funds (Forbes)
Michael B. Marois: Calpers to Exit Hedge Funds, Divest $4 Billion Stake (Bloomberg)