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Hedge Funds, Private Equity Require Different Skills: CalPERS' Anson

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GENEVA (–Speaking at a conference of institutional fund managers, Mark Anson, the chief investment officer for the US$177 billion California Public Employees’ Retirement System, said pension funds should take care not to try to wring too much out of their traditional market-tracking beta portfolios, instead leaving the job of producing the excess returns to alpha portfolios that include alternatives.

According to published reports on and elsewhere, Mr. Anson said beta investments–those that track equity and bond benchmarks–were still important but could not always be counted on for excess returns. He spoke at the International Centre for Business Information’s Institutional Fund Management conference.

Mr. Anson said alpha could best be derived from sources such as alternative investments, including hedge funds. CalPERS’ trustees recently voted to double the public pension fund’s hedge fund allocation to US$2 billion. also noted that Mr. Anson warned about a possible “convergence” between hedge funds and private equity. The two asset classes demanded very different skill sets, he said.

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Contact Bob Keane with questions or comments at: [email protected].