May 31, 2011
External Affairs Branch
Patricia K. Macht, Deputy Executive Officer
Brad Pacheco, Chief, Office of Public Affairs
Contact: Clark McKinley, Information Officer
CalPERS Backs New Investor Guide for Hedge Fund Relationships
SACRAMENTO, CA – The California Public Employees' Retirement System (CalPERS) has strongly endorsed a new guide by the Investor Steering Committee of the Alternative Investment Management Association (AIMA), the global hedge fund association, to promote better alignment of interests between institutional investors and hedge fund managers.
"Public pension funds and other institutional investors account for most of the capital within the hedge fund industry," said Joseph Dear, CalPERS Chief Investment Officer. "This guide by AIMA's Investor Steering Committee contains recommendations that will enhance our partnerships with fund managers. It's a good benchmark for this maturing industry."
The Investor Steering Committee paper, A Guide To Institutional Investors' Views and Preferences Regarding Hedge Fund Operational Infrastructures recommends, for example, that:
- Hedge funds' investment objectives and strategies should describe the assets to be invested, geographic sectors where the assets may be limited and management trading style;
- Hedge funds have predominantly independent boards of directors who are materially free of conflicts with the investment manager;
- Hedge fund risk reporting should give investors the necessary tools to understand how much risk managers are utilizing within their portfolios;
- Investors should be able to track the performance of hedge funds based on quantitative and qualitative reports that are updated at least monthly; and
- Hedge fund managers should give investors the information they need to analyze a fund's goals, strategy capacities and resources to achieve those goals.
CalPERS is the nation's largest public pension fund with approximately $236 billion in market assets. It provides retirement benefits to more than 1.6 million State, public school, and local public agency employees, retirees, and their families, and health benefits to over 1.3 million members. The average CalPERS pension is $2,220 per month. For more information about CalPERS, visit www.calpers.ca.gov.
As the global hedge fund association, the Alternative Investment Management Association (AIMA) has over 1,200 corporate members (with over 5,000 individual contacts) worldwide, based in over 40 countries. Members include hedge fund managers, fund of hedge funds managers, prime brokers, legal and accounting firms, investors, fund administrators and independent fund directors. They all benefit from AIMA's active influence in policy development, its leadership in industry initiatives, including education and sound practice manuals and its excellent reputation with regulators worldwide. AIMA is a dynamic organization that reflects its members' interests and provides them with a vibrant global network. AIMA is committed to developing industry skills and education standards and is a co-founder of the Chartered Alternative Investment Analyst designation (CAIA) – the industry's first and only specialised educational standard for alternative investment specialists. For the hedge fund paper and further information, please visit AIMA's website.
About AIMA's ISC:
ISC members are as follows (* denotes co-authors of the paper)
Committee Members 2011
Mark Anson (Oak Hill Investment Management LP)
Eric Breval (Fonds de Compensation AVS)
Luke Dixon* (Universities Superannuation Scheme)
Christopher Fawcett (Fauchier Partners)
Cathy Iberg (UTIMCO)
Gumersindo Oliveros (Kaust Investment Management Company)
Robert De Rito (APG Asset Management)
Kurt Silberstein* (CalPERS)
Michelle McGregor Smith* (BA Pension Investment Management Ltd)
Vera Kupper Staub (Pensionskasse Stadt Zurich)
John Stevens (General Motors Asset Management)
Jacob Tsang (Hong Kong Jockey Club)
Tom Kehoe (AIMA)
Andrew Baker (CEO, AIMA)
Todd Groome (Chairman, AIMA)
The other co-authors of the paper, Andrea Gentilini (UBP) and Adrian Sales (Albourne Partners), are members of AIMA's Research Committee.