Texas (STOTX1)’s Permanent School Fund may hire in-house money managers to oversee its $25 billion in assets because returns are being “eaten alive” by hedge-fund fees, CIO Holland Timmins told Bloomberg gurus.
Returns were less than 1 percent for the 44 months through November on assets managed by the five companies that bundle multiple hedge funds into single investment vehicles, Timmins said Jan. 25 at a State Education Board meeting. After fees, the return was negative, he said.
“The sector that should have enhanced our funding for schools actually detracted from it,” Timmins said. “We had a positive return in the asset class, modestly, but it got eaten alive by the fees.”
Hedge-fund expenses have reached about $72.7 million since 2008, according to a document Timmins distributed among board members. The reserve backs school-district debt and distributes $1 billion annually to support public education in the second- biggest U.S. state by population. The board is set to vote on the issue at a meeting today.
Find out more at http://www.bloomberg.com/news/2012-01-27/texas-fund-eaten-alive-by-hedge-fees-may-curb-costs-by-hiring-in-house.html
No comments:
Post a Comment