Victor Nava on California's Pension System Dumping Hedge Funds
Last week, the California Public Employees' Retirement System (CalPERS), the largest public pension system in the U.S., announced that it's going to divest its assets from hedge funds. The move to withdraw about $4 billion of CalPERS $299 billion in total funds is the result of years of poor performance from hedge funds that come at a steep cost and with substantial risk. What led so many U.S. pension funds to invest in hedge funds in the first place? The answer, Victor Nava writes, is a long history of unrealistic expectations and mismanagement on behalf of the state government.