Three years ago this month, CalPERS announced its intention to exit its hedge fund investments, leading many to speculate that more US-based public pension funds would follow suit. However, as our data reveals below, US-based public pension funds currently have more capital invested in hedge funds than ever before, despite more notable pension funds such as New York City Employees Retirement System (NYCERS) and New Jersey State Investment Council also announcing cuts from their hedge fund portfolios in the past two years.
Preqin tracks 329 US-based public pension funds; among these are 21 that have made fresh allocations to hedge funds over the course of 2017 so far. One of the more prolific of these is State of Wisconsin Investment Board, which has made several investments in 2017; the $102bn public retirement system invests more than $4.5bn in hedge funds, and among its investments in 2017 is an allocation to Efficient Access 4x, a fund of CTAs.
Although it is clear that a significant number of the largest US-based public pension funds are paying close attention to their hedge fund portfolios, the CalPERS news did not trigger a widespread exit of capital from these retirement schemes. In fact, as a whole, this group has increased its exposure to these investments over recent years, with many actively investing fresh capital over 2017.