Pension funds fire underperforming hedge fund managers |
Date: Monday, April 21, 2008
Author: HedgeWorld
Institutional investors are firing underperforming hedge fund managers, say institutional consultants. Loss-incurring quant funds are particularly under pressure from pension fund withdrawals. The pruning and reallocation of assets are also hurting long/short equity strategies, tactical asset allocation specialists and traditional long-only fund managers.
P&I claims that managers under the microscope for products that are now out-of-favor include Mellon Capital Management, San Francisco; Barclays Global Investors, San Francisco; State Street Global Advisors, Boston; and Goldman Sachs.
Pension fund redemptions confirm the ongoing reports of hedge fund firms disclosing heavy withdrawals or of receiving large redemption notices. Several of the hedge funds experienced sharp downturns during market turbulence and some have closed down. Credit strategy hedge funds in particular have experienced redemption applications from pensions and other investors.
P&I findings are interesting because pension fund trustees in the past acted conservatively and slowly. The time lag between dissatisfaction and withdrawals was relatively long. Now pension fund operational teams and their advisors are moving swiftly to push withdrawal recommendations through at trustee meetings. They are under pressure to counter underperformance in their own portfolios.
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