Institutional Investors

Transit plan considers HFs as a destination

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The $400 million AC Transit District Employees’ Retirement System in California is understood to still be reviewing hedge funds after a presentation early this year.

The discussions so far have centred on the reality that equities make up 60% of the pension portfolio, but account for 90% of the risk. Diversification is necessary to hedge some of that risk long-term. The presentation from consultant NEPC and staff covered hedge fund performance, their headline risk and their characteristics.

It was proposed that if the retirement plan moves forward in absolute return strategies via funds of hedge funds rather than