The State Employees Association of North Carolina wants state Treasurer Janet Cowell to follow CalPERS’ lead and get out of hedge funds.
Worried the action of the country’s largest public pension fund will cause more hedge fund investors to pull out, SEANC officials are calling on Ms. Cowell, sole trustee of the $90 billion North Carolina Retirement Systems, to liquidate its entire hedge fund portfolio immediately.
The $298 billion California Public Employees' Retirement System, Sacramento, announced Sept. 15 it will close its $4 billion hedge fund portfolio.
Schorr Johnson, Ms. Cowell’s spokesman, declined to comment on the request. Ms. Cowell was not available.
As of March 31, North Carolina had $288 million, or 0.33% of its portfolio, in hedge funds, according to an NCRS investment management division report.
CalPERS’ move “certainly changes things in terms of what all the (public pension) funds are going to be looking at,” said Ardis Watkins, SEANC’s legislative director, who complained North Carolina’s hedge fund investments have underperformed in the past five years.
North Carolina’s hedge fund portfolio contributed 0.02% to total fund performance in the year ended March 31, according to the management division report.
“Hedge funds have high risk and high fees,“ Ms. Watkins said in an interview.
SEANC’s concern over alternative investments such as hedge funds is part of a broader campaign by the organization to end the sole trustee arrangement and get more information on investment fees.