New York Sun – The city comptroller, William Thompson Jr., is in the final stages of studying whether the city’s five pension funds should start investing in hedge funds.
The comptroller raised the possibility of the change in investment policy during a speech at an economic forum convened by the Reverend Jesse Jackson earlier this week. He later confirmed to The New York Sun that it was something his office is considering.
Advocates say hedge funds could help the city maximize investment returns, and that many other large institutional investors, including the State of New York and many colleges and universities, already invest in the funds. Critics say the funds are risky and that investing in them could expose the comptroller to accusations of “pay to play,” accepting campaign contributions from money managers who earn fees for managing public funds.
Mr. Thompson is expected to run for mayor in 2009, and hedge fund managers and their lawyers could prove to be a rich source of campaign funds.
The assistant comptroller for pensions, Joseph Haslip, said the office, which manages the city’s five funds, valued at about $95 billion, is “in the final leg of research” and plans to bring the hedge fund issue to its 40 trustees “within this year.”
