US - Institutional investors are becoming more comfortable with hedge funds, but most have also called for a more rigorous risk management program, according to a survey by State Street released today.
More than a third of the pension funds, endowments and foundations surveyed, with combined assets of over US$1trn, said they would increase the use of third party resources for due diligence and investment recommendations when using hedge funds.
Executive vice president and head of State Street’s investment servicing business Gary Enos said: “The tools, methods and best practices for managing risk will further develop as hedge funds become a tried and true staple of institutional portfolios.”
More than half now invest in some kind of hedge fund, although over a third of these no longer use fund-of-fund managers, preferring to invest in one single institution.
State Street puts this down to “growing sophistication and familiarity with hedge fund investing and a cost-benefit analysis in favour of a do-it-yourself approach”.
A third of respondents identified high fees to be the biggest hurdle faced by hedge funds.
Senior managing director of absolute return strategies at State Street, Jane Tisdale, said investors would likely begin to force down fees for all but the most successful funds: “As fees continue to eat away at precious returns, more institutions will balk at paying ‘alpha’ fees for ‘beta’ performance.”
The Pensions Regulator (TPR) and Labour MP Stephen Kinnock and will listen to the experiences of steelworkers when transferring their pensions away from the British Steel Pension Scheme (BSPS) next week in Port Talbot.
Just Group has acquired a 75% stake in the holding company of Corinthian Pension Consulting in a bid to strengthen its professional defined benefit (DB) advisory services.
The Pensions Regulator (TPR) has exercised its production order power under the Proceeds of Crime Act 2002 for the very first time as part of a fraud investigation.
The ITN Limited Pension Scheme has named Trafalgar House as its administrator for an initial term of five years.