Hedge fund allocations chopped again, this time at the Pennsylvania SERS

June 26, 2019 | Hedge Funds

Market volatility and political pressure force the decision

The $29 billion Pennsylvania State Employees’ Retirement System has decided to reduce both its rate of return as well as allocations to hedge funds.

The SERS lopped its long-term assumed rate of return from 7.25% to 7.125%, citing the current choppy market environment.

The fund also shifted money out of its hedge fund category and into bonds, pending further evaluation of strategies.

Politicians want lower offered returns and lower investment manager fees

State politician and Treasurer Joe Torsella has been a votary of lower assumed rates of return at the SERS and welcomed the decision by its Board.

“By modestly reducing the assumed rate of return and reducing allocation to costly alternative hedge funds, SERS can reduce risk to the fund and improve security for beneficiaries,” said Torsella.

Meanwhile Pennsylvania Democrat Gov. Tom Wolf has been known for his preference for low-cost index funds over high-fee investment managers at hedge funds.

First quarter 2019 performance

The Pennsylvania SERS posted a return of 8.2% for the first quarter of 2019.

Global public equity earned 12.9% while hedge funds generated (7.1%), real estate (4.3%), bonds (3.7%), private equity (0.6%), and cash (0.4%).

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Latest Alternative Investment News

Digital Assets: India To Clamp Down On Cryptocurrencies Via Legislation By Year-End
November 24, 2021     Digital Assets, Latest News, News

The legislative agenda for the upcoming winter session of the Lok Sabha, the lower house of India’s parliament, shows that a bill titled “The Cryptocurrency and Regulation of Official Digital…

FinTech: Klarna Launches “Pay Now” In The US, Klarna Card Soon To Follow
November 24, 2021     FinTech, News

Klarna, the Stockholm-headquartered fintech powerhouse last valued at $45.6 billion, has brought a “Pay Now” offering to consumers at retailers wherever Klarna is accepted. The company also announced a Klarna…

Venture Capital: Agtech And Farmer-To-Farmer Platform FBN Raises $300M
November 24, 2021     ESG and Sustainability, News, Venture Capital

Farmers Business Network (FBN) is a farmer-to-farmer network launched in 2014 as an information source and for sharing of agronomic precision data. It now has thousands of farmer-members managing millions…

Venture Capital: Arc, Which Makes $300K Electric Boats, Snags $30M
November 24, 2021     News, Venture Capital

Arc, a startup led by former SpaceX engineers and developing electric boats, announced its $30 million Series A raise led by Greg Reichow, a former Tesla VP of Production, now…