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.<\/p>\n
Board members and their financial advisers said hedge funds’ reputation as risky investments is undeserved and that they routinely outperform other foundation investments.<\/p>\n
“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.”<\/p>\n
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.<\/p>\n
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.<\/p>\n