Hedge Funds Provide Worst Long-Term Gains to U.S. Pension Plans
- REITs, private equity topped net returns in the 17-year study
- Report comes as pensions weigh leaving hedge funds over fees
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Hedge funds provided lower average net annual returns to U.S. pension funds than any asset class except cash, according to a report analyzing $8.4 trillion in defined-benefit plans from 1998 through 2014.
“If cash is excluded as an asset class, then hedge funds must be considered the worst performing,” with an average compound return of about 5 percent, according to the study of retirement-plan assets by CEM Benchmarking, a Toronto-based consultant for institutional investors.