CalPERS Hedge Funds--A Fool's Errand

Published: Tuesday, Aug. 26, 2014 - 12:08 pm
Last Modified: Wednesday, Aug. 27, 2014 - 11:45 am

Re "CalPERS fund seeks to lighten risk" (Business, Aug. 24): Although CalPERS earned 18.4 percent in the year ending June 30, they could do better. The total stock market returned 25.2 percent during this same period. Last year, CalPERS paid hedge fund managers $115 million or 2.6 percent in fees. It is a fool's errand to invest in hedge funds which are volatile, have performed poorly over the past years and have excessive management fees that drain away annual returns.

With a building full of investment advisers, why is CalPERS paying exorbitant fees to hedge fund managers or other fund managers? Actually, no one should be paying more than 0.1 to 0.3 percent in fees to manage their retirement investments.

CalPERS should not only be seeking to reduce its risk but should be reviewing all of its investments to minimize management fees, finder fees and all other fees to reasonable levels to maximize yearly returns. -- Paul Richins, El Dorado Hills

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