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Barry Ritholtz

The Reason Pension Plans Stick With Hedge Funds

They let politicians avoid making needed payments to retirement plans.
The crisis ahead.

The crisis ahead.

Photographer: Brendon Thorne/Bloomberg
Updated on

A new report poses an interesting question: “Would public pension funds have fared better if they had never invested in hedge funds at all?

This is a subject we have investigated numerous times. The conclusion of the report confirms our earlier commentary: a small number of elite funds generate alpha (market-beating returns) after fees for their clients while the vast majority underperform yet still manage to overcharge for their services.