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Bloomberg – Massachusetts will cut investments in hedge funds after its public pension plan lost a record 24 percent on all assets in the fiscal year ended June 30.
The state pension plan’s board of trustees voted today to lower the amount of money invested in hedge funds to 8 percent, or about $3 billion of the $37.7 billion it oversaw at the end of June, from 12 percent, which is about $4.5 billion. The vote reversed a five-year effort by the pension system to boost returns by expanding such alternative investments.
”We all have to understand we’re making a bet on what assets will do well,” said state Treasurer Timothy Cahill, chairman of Massachusetts’s pension reserve investment management board. “Ultimately, we don’t make decisions based on the short-term, but we get measured on the short-term.”
Examiner – There is a global movement towards the harmonization of best practices and standards in the hedge fund industry amongst investors, hedge funds, funds of hedge funds, policymakers, service providers and regulatory authorities. In response to the global financial crisis, the G20 agrees on the need to extend regulation and oversight to all systemically important firms, including hedge funds.
Organizations such as the Alternative Investment Management Association (AIMA), Hedge Fund Standards Board (HFSB), International Organization of Securities Commissions (IOSCO), Managed Funds Association (MFA) and the Asset Managers’ Committee of the President’s Working Group (PWG) have individually published viewpoints on how a system of best standards and practices should be adopted.
Times Online – The Massachusetts Pension Reserves Investment Management Board, which oversees $38 billion, voted to fire hedge-fund firm Austin Capital Management after losing $12 million with alleged Ponzi scheme operator Bernard Madoff.
The state pension board also decided at a meeting in Boston today to dismiss Ivy Asset Management, the hedge-fund unit of Bank of New York Mellon Corp., because several senior managers have left the firm. About $430 million in pension assets were invested with Ivy and $130 million with Austin, the board said.
Austin invested pension assets with Tremont Partners, the hedge-fund unit of Massachusetts Mutual Life Insurance Co. Tremont placed money through its Rye Select Broad Market Prime Fund LP with Madoff, the New York financier accused of fraud in a scheme that may have cost clients $50 billion.
