Pension funds may have more money invested with hedge fund managers than endowment funds do, recent survey results show.
The findings go against the common perception that pension funds are not big investors with hedge fund managers.
A survey conducted by WPG-Hennessee Hedge Fund Advisory Group, a division of Weiss, Peck & Greer L.L.C., New York, shows pension assets account for about 10.2% of hedge funds assets.
Endowments represent on average just 5.5%, WPG-Hennessee says.
E. Lee Hennessee, director, said that although endowment funds may be bigger users of hedge funds in terms of percentage of assets, a small amount of investment by pension funds' results in a larger absolute amount of assets under management.
Market neutral style of managers had the highest concentration of pension fund assets, 19%. Next was value managers, with 15.3%; opportunistic, 12%; risk arbitrage, 9.9%; and growth, 9.4%.
Ms. Hennessee said fund-of-funds managers, which also may contain pension fund assets, also represented a sizable chunk of assets, representing on average 9.9% of managers surveyed.
Hedge fund managers using the macro style of investment reported their pension fund assets to be an average of just 7.2% of assets, while endowment funds represented 15.8% of assets.
Ms. Hennessee said that is because macro managers have posted the longest track records, and have gained a large share of endowment assets often through endowment trustees who personally invest with hedge funds.
