Aft Report Questions Merit of Hedge Fund Investments

pension_report_cover_640A new AFT report titled “All That Glitters Is Not Gold,” produced with the Roosevelt Institute, shows that hedge fund managers have collected more than $7 billion in fees from the 11 public pension funds the report looked at. More specifically, for every dollar in net return to the pension funds, there was $1.57 in gross return; the hedge fund managers kept 57 cents of that in management and incentive fees. But in addition to charging these outrageous fees to manage portions of public employees’ hard-earned pensions, the hedge funds these pensions invest in have consistently underperformed, which translated into $8 billion in lost investment revenue at these 11 pension funds, according to the report. AFT President Randi Weingarten says the report was intended to give information to pension trustees so they can ask tough questions and fulfill their fiduciary duties to their pension funds and their participants.