Politics & Regulation

US public funds likely to up hedge funds faster than corporates, says Agecroft


US public pension funds may increase their allocation to hedge funds at a faster rate than corporate pension plans due to sweeping new corporate pension legislation that is beginning to take hold in the US, according to Agecroft Partners.

The 2006 Pension Protection Act that became effective in 2008 includes two provisions that will alter how many corporate pension fund assets are managed. The first provision affects how companies determine the present value of the future liability stream, which includes many variables, but dominated by the discount rate.

The second provision reduces the time period that corporations can amortise