Friday, July 31, 2015

NJ dumps three hedge funds as values tank

New Jersey has dumped its stake in at least three hedge funds as values fall, reports Pensions & Investments

NJ dumps three hedge funds as values tank

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New Jersey, whose former $80 billion+ pension system has shrunk to $59 billion, was one of the last big pension plans to start buying hedge funds, over the initial objections of public employee unions, Republicans, and some veterans of the state investment staff.

The state has already traded out of some of those positions: "The New Jersey Division of Investment, Trenton, decided to redeem its $100 million investment in the GoldenTree Master Fund," Pensions & Investments reports, citing NJ Treasury spokesman Tom Vincz. NJ "invested in the GoldenTree hedge fund in January 2007. But the fund, which invests in below-investment-grade bank loans, high-yield bonds, middle-market loans, real estate and equities, had suffered 'significant losses' in 2008." Besides GoldenTree, NJ has also "redeemed" investments in Satellite Fund II and the Black River Multi-Strategy Leveraged Fund, P&I reported.

How has New Jersey done with the $9.3 billion it put into hedge funds, private equity and other "Alternative Investments" as the market peaked in the mid-2000s? Better than if it had kept them in stocks, investment chairman Orin Kramer told me.

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PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

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Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

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