The State Worker

Chronicling civil-service life for California state workers

From Saturday's Wall Street Journal:

After suffering through 2008, some big pension funds are having second thoughts about their exposure to private-equity firms, hedge funds and other nontraditional investments.

Across the U.S., pension-fund managers and investment officers have been scrutinizing their asset allocations, especially toward alternative investments. In addition to wilted returns, pension funds are leery because some hedge funds have made it hard to cash out, including by postponing redemption requests from investors.

Other pension funds that barreled into private equity have been crunched by capital calls, or demands to deliver cash that are often conditions of investment with private-equity firms. While those obligations aren't a surprise, many pension funds expected to offset the payments with returns from other private-equity investments. Such gains have been rare.

The story, which you can read by clicking here, focuses on CalPERS and CalSTRS investments and how the funds are reviewing them in light of recent losses.

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About The State Worker

Jon Ortiz The Author

Jon Ortiz started The State Worker blog and column in 2008 as a member of The Bee's business staff, where he covered workplace and labor issues. He moved to the Capitol Bureau in January 2009 to cover state employment issues full time. Join him for updates and debate on state pay, benefits, pensions, contracts and jobs. Contact him at (916) 321-1043 and at jortiz@sacbee.com.

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