Hedge Fund Returns: Too Good?

There are many ways to value investments in hedge funds but, with public pension funds, as the value you put on these investments goes higher it reduces the amount of contributions the sponsors of these plans are told to put in while also increasing the fees of those who sell (and value) those investments. The incentive is all to go high with the value.

Two articles came out this week that should raise doubts about some of these valuation methods.

Pensions and Investments reported on spectacular hedge fund returns for the year ended June 30, 2017 in a few public plans they looked at:

18.5% return annual return for the New Jersey Division of Investment (equity-oriented)!

Then there is the second article.

9 responses to this post.

  1. Posted by skip3house on November 28, 2017 at 4:51 pm

    Forbes does not allow ad block, so……..

    Reply

  2. Posted by Anonymous on November 28, 2017 at 9:15 pm

    Indubitably my dear skip3house

    Reply

  3. Posted by NJ2AZ on November 28, 2017 at 11:05 pm

    no reason to question these, just like there’s no reason to question those assumed 7.5% rates of return. everything is fine.

    Reply

    • Posted by dentssdunnigan on November 30, 2017 at 11:45 am

      Better make that a Coke …..”The gap between what the state has on hand and what it owes current and retired public workers remains the worst among U.S. states.

      As of July 2016, it had assets to cover just 31 percent of its liabilities. That was down from 37.5 and percent 42.5 percent in the prior two fiscal years.”

      Reply

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