Skip to main content
MENU
Subscribe
  • Sign Up Free
  • LOGIN
  • Subscribe
  • Topics
    • Alternatives
    • Artificial Intelligence
    • Consultants
    • Defined Contribution
    • ESG
    • ETFs
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Regulation
    • SECURE 2.0
    • Special Reports
    • Washington
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Influential Women in Institutional Investing 2023
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • ESG Investing | Industry Brief
    • Innovation in ESG Investing
    • 2023 ESG Investing Conference
    • ESG Rated ETFs
    • Divestment Database
  • Defined Contribution
    • Latest DC News
    • The Plan Sponsor's Guide to Retirement Income
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • DC Plan Design: Improving Participant Outcomes
    • 2023 Defined Contribution East Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Research Center
    • The P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
  • Print
Breadcrumb
  1. Home
  2. HEDGE FUNDS
February 05, 2018 12:00 AM

Hedge fund investments rebound, up 5.6%

Single and multistrategy up 6.1%; fund-of-fund assets rise 3.4%

Christine Williamson
  • Tweet
  • Share
  • Share
  • Email
  • More

    Hedge fund and hedge fund-of-funds investments of defined benefit plans among Pensions & Investments' 200 largest U.S. plan sponsors rose 5.6% to an aggregate $159.6 billion in the year ended Sept. 30.

    The asset growth was good news for large corporate and public pension funds: Combined assets in hedge funds and funds of funds had fallen 6.4% to $151.1 billion in the year ended Sept. 30, 2016.

    In fact, the combination of new allocations to hedge funds/funds of funds and strong investment returns as of Sept. 30 brought 2017 assets closer to the $161.4 billion invested by funds in P&I's top 200 universe as of Sept. 30, 2015.

    In the 12 months ended Sept. 30, 2017, the HFRI (Hedge) Fund Weighted Composite index gained 7.1%, the HFRI Fund of Funds Composite index rose 6.5% and the HFRI Fund of Funds Conservative index was up 4.6%.

    All three indexes are produced by Hedge Fund Research Inc.

    The split between hedge fund and fund of funds investments in P&I's aggregate total remained unchanged at 83% and 17%, respectively, in 2017.

    Investments in single and multistrategy hedge funds by the largest funds in P&I's universe rose 6.1% to $132.2 billion in the year ended Sept. 30, 2017, and hedge fund-of-funds assets rose 3.4% to $27.4 billion.

    By contrast, P&I survey data as Sept. 30, 2016, showed direct investments in hedge funds fell 4.7% in the year and hedge fund-of-funds assets were down 13.7%.

    The largest hedge fund investor in P&I's 2017 survey remained the Teacher Retirement System of the State of Texas, Austin, which reported a 10% increase to $11.8 billion in single and multistrategy hedge funds in the year ended Sept. 30.

    Michigan Retirement System, Lansing, followed with an increase of 7.8% to $10.1 billion in hedge funds and funds of funds in the year ended Sept. 30. The Michigan system's funds-of-funds portfolio rose 12.5% to $6.1 billion and its hedge fund portfolio increased a more modest 1.5% to $4 billion.

    The Virginia Retirement System, Richmond, moved up to third place, with asset growth of 13.8% to $8.7 billion in direct hedge fund investments, followed by the California State Teachers' Retirement System, West Sacramento, which increased its hedge fund investment by 221% to $7.8 billion, and the Massachusetts Pension Reserves Investment Management Board, Boston, which experienced a 12.9% increase in its mixture of hedge funds and funds of funds to $7.1 billion.

    P&I's analysis of investment trends found several large, experienced hedge fund investors significantly increased their hedge fund allocations in the year ended Sept. 30. The Los Angeles Water & Power Employees' Retirement Plan reported the highest growth among the funds in P&I's universe.

    The fund's hedge fund-of-funds assets increased 259% to $682 million in the year ended Sept. 30, thanks to a large allocation to Blackstone Alternative Asset Management.

    CalSTRS was the second-largest increase among P&I's universe. All of its hedge fund assets were invested in trend-following managed futures trading and global macro strategies as of Sept. 30, data provided by the fund for P&I's survey show.

    In an interview with P&I in September, Christopher J. Ailman, CalSTRS' chief investment officer, said the increased hedge fund allocation, including the hire of four unnamed trend-following managers, were part of the fund's new $20 billion risk-mitigation asset class.

    Aggregate assets invested in managed futures/global macro hedge fund category by pension funds in P&I's top 200 universe increased nearly 50% to $22.3 billion in the year ended Sept. 30.

    The Missouri State Employees' Retirement System, Jefferson City, increased its allocation to managed futures and global macro strategies by 954% to $2.1 billion in the year ended Sept. 30, data from the fund's survey showed.

    Other hedge fund strategy classes tracked by P&I's survey experienced declines in the year ended Sept. 30: equity hedge, down 2.8% to $16 billion; relative value, down 6.6% to $11.3 billion; and event-driven, down 13.8% to $12.5 billion.​

    Related Articles
    CalSTRS ahead of schedule on funding new risk mitigation portfolio
    Largest U.S. funds set record at $10.3 trillion
    Target-date assets continue to climb
    Inflation-protected assets leap; active fixed income is steady
    Largest U.S. funds set record at $10.3 trillion
    How the data were compiled
    Funds jittery over stock market put their faith in alternatives
    Target-date assets continue to climb
    Inflation-protected assets leap; active fixed income is steady
    Hedge funds produce higher risk-adjusted returns than equities, bonds – research
    50% of hedge fund allocators expect to hike investments in 2018 – Deutsche Bank…
    Commentary: Do 'trend' risk premiums explain CTA performance?
    Hedge funds of funds are back, but this time with a few twists
    Recommended for You
    Blackstone_Closeup_1550_i.jpg
    Blackstone to end legacy strategy that gave money to hedge funds
    Boaz_Weinstein_i.jpg
    Rithm completes deal to buy hedge fund Sculptor after monthslong drama
    ONLINE_170729957_AR_0_YQFJVDTTOMZN.jpg
    Scaramucci says SkyBridge is exploring an acquisition next year
    Open Window of Opportunity in Real Estate
    Sponsored Content: Open Window of Opportunity in Real Estate
    Sponsored
    White Papers
    A Guide to Home Equity Investments: The Untapped Real Estate Asset Class
    Modernize your K-12 retirement plan with vendor consolidation
    Q4 2023 Credit Outlook: Price Is What You Pay, Value Is What You Get
    There's More Than One Way to Be a Climate Investor
    Exploring the Commercial Application of Artificial Intelligence
    Private Credit Insights: Every Problem Is an Opportunity in Disguise
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    October 23, 2023 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Custom Content
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Artificial Intelligence
      • Consultants
      • Defined Contribution
      • ESG
      • ETFs
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Regulation
      • SECURE 2.0
      • Special Reports
      • Washington
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Influential Women in Institutional Investing 2023
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • ESG Investing | Industry Brief
      • Innovation in ESG Investing
      • 2023 ESG Investing Conference
      • ESG Rated ETFs
      • Divestment Database
    • Defined Contribution
      • Latest DC News
      • The Plan Sponsor's Guide to Retirement Income
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • DC Plan Design: Improving Participant Outcomes
      • 2023 Defined Contribution East Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Research Center
      • The P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
    • Print