With funding of public pension plans generally improving, primarily due to equity markets bouncing back, their interest in hedge funds is waning, HedgeWorld.com reports. A recent
Back then, the ratio of assets to liabilities had a median of 80%, a decrease from the 95% marked in 2001. As a result, a number of pension plans decided to invest in hedge funds. But in 2004, the funding ratio for pension funds improved to 88%.
Steven Foresti, managing director at Wilshire, commented: "Now institutions that are moving to hedge funds are thinking about it and moving in a more strategic way." Foresti predicts that hedge funds will not exceed 10% of a city or county pension fund portfolio.