Pension plan sponsors are putting more money into hedge funds, and a lot of it is going into market-neutral strategies, according to a semi-annual survey of hedge fund managers conducted by the Hennessee Hedge Fund Advisory Group of Weiss Peck & Greer L.L.C., New York.
The most recent survey shows pension fund assets making up an average of 10% of assets at private partnership funds, an increase from the previous 8.7%.
And close to 35% of the assets of hedge funds using market neutral strategies come from pension funds, on average, an increase from the 34% reported in the previous survey.
Recent changes in legislation should allow pension fund use of hedge funds to grow faster, the survey notes.
E. Lee Hennessee, associate principal for Weiss Peck, said in an interview it's interesting that even though hedge fund managers' market forecasts in the last survey turned out to be largely wrong, performance still has been relatively good. She attributed that to hedge funds' relatively greater investment flexibility and nimbleness.