Hedge Fund Reader : Pension Funds adopting a wait-and-watch strategy before taking a plunge into Hedge Funds

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July 11, 2005

Pension Funds adopting a wait-and-watch strategy before taking a plunge into Hedge Funds

KPMG asset Management in collaboration with another firm has recently put forward a detailed report on the acceptability and future of Hedge Funds as an investment instrument by Pension Funds. The report indicated that new money into hedge funds is very likely to come from Pension Funds. This is so because these funds are waiting before they take the plunge. The hesitation prima face comes from the lack of complete understanding of certain parts of how hedge funds operate. Also strategies like leverage and opacity are leading to some amount of discomfort amongst pension fund managers. This highlights the need for educating fund mangers on hedge funds. The report also indicated that North American Pension Fund managers are more likely to take the plunge as compared to European Pension Fund Managers. This may be because the pension funds outside North America invest in hedge funds more for opportunities for quicker returns rather than for strategic reasons. Hedgeco Breaking News reports:

"In our interviews with pension funds and their consultants, one message came through clearly: trustees need more education and information than they currently have."

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July 11, 2005 in Gossip & Scandal | Permalink