While the Pennsylvania State Employees' Retirement System decided to stick a toe in the hedge-fund waters in 1999, CIO Peter Gilbert had been championing the cause for two years prior. There were only a handful of institutions in the large private capital pools, which were controlled by the wealthy at the time, according to BusinessWeek Online

As Gilbert remembers, "We had become disillusioned with traditional money managers' ability to outperform the benchmark over long periods."

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