Pension funds to focus on due diligence and expertise in post-Madoff era

Thu Apr 23, 2009



Susan Barreto, deputy editor, InvestHedge

Institutional investors had a bad year in 2008. The sharp fall in equities eroded many of the assets in the portfolio while hedge funds appeared to fail in delivering what they had promised on the tin. On second glance, depending which hedge funds were selected and how investors were invested, perhaps the hedge fund investing argument still sticks – given the blood bath in the equity markets.

The rate at which institutional hedge fund capital was put to work was challenged as never before as the size of individual mandates shrunk to total millions, rather than billions, of dollars. The heady pace of investing in funds of hedge funds seems to have slowed significantly as it seems that in 2008, at least, larger pension funds were tending to allocate directly to hedge funds en masse for the first time.

Given the climate of fear following...

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