Aug. 2–MORRISVILLE — The Golden LEAF Foundation decided Tuesday to increase its hedge fund investments by $24 million, using transfers from money now invested in stocks and bonds.
Board members and their financial advisers said hedge funds’ reputation as risky investments is undeserved and that they routinely outperform other foundation investments.
“There’s a perception here [that] you have a bigger risk, but the opposite is true,” H. Kel Landis III, a board member and former head of RBC Centura bank, said after the board meeting Tuesday. “In reality, you have higher returns and less risk. History says you do this.”
The Golden Long-term Economic Advancement Foundation is a nonprofit organization set up in 1999 to take half the state’s health-care settlement with tobacco companies to assist in economic development.
The foundation has about $600 million in investments, which includes about $90 million, or 15 percent, in hedge funds. Another 45 percent is invested in publicly traded stocks, 15 percent in bonds, and the remaining 25 percent is a mix of private equity, real estate and cash.
