CalPERS shows how to do mixed investing
CalPERS' chief investment officer, Russell Read, discusses how they mix hedge funds with funds of funds in one of the world’s biggest public fund allocations to hedge funds
California Public Employees’ Retirement System (CalPERS) was one of the early public fund adopters of hedge funds, investing directly when many of its peers were testing the waters with funds of funds. Today, the pension fund can invest up to $12 billion, equivalent to roughly 8% of CalPERS’ global equity portfolio, in hedge funds. This means that another $6 billion or so can be put to work in absolute return strategies.
At the same time, CalPERS has started to use funds of funds. In a move that seems to be going in the opposite direction to most institutional investors that start by investing via funds of funds, CalPERS is now using...