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Markets & Stocks
CalPERS enters hedge funds
August 31, 1999: 10:25 p.m. ET

Pension system plans to put as much as $11.25b in high-risk investments
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NEW YORK (CNNfn) - The California Public Employees Retirement System (CalPERS) is planning to invest as much as $11.25 billion in hedge funds, according to published reports.
     CalPERS board approved the change in investment strategy at a meeting two weeks ago, according to the Financial Times newspaper.
     In Wednesday's edition the newspaper said the pension fund's board approved a plan to move as much as one-quarter of the $45 billion the system invests in public markets into hedge funds. CalPERS also owns properties and holds non-negotiable securities for a total of $160 billion in the system's coffers.
     The system made its first hedge-fund investment last week when it committed to put $300 million into the Pivotal Partners Fund, a hedge fund established last year by two former money managers from Amerindo Investment Advisors, according to the Financial Times.
     CalPERS is an active investor in stocks and bonds, but had never before invested in hedge funds.
     CalPERS told the newspaper it was "in no rush" to invest the full $11.25 billion, and emphasized that it would look at other hybrid investments such as arbitrage funds.
     "We are simply branching out and becoming more diversified," a spokesman told the newspaper. "Hedge funds are not quite as risky as private equity funds, and we will steer clear of funds that use a lot of leverage to make bets on the market."
     The news that the nation's largest public pension funds plans to move into the hedge-fund market as a way to boost returns comes almost a year after the collapse of hedge fund Long-Term Capital Management triggered a crisis on Wall Street.
     CalPERS provides retirement and health benefits to more than 1 million state and local public employees and their families.Back to top

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.