Why Calpers Decided to Divest $4B From Hedge Funds

The transcript discusses the challenges faced by pension funds, particularly CalPERS, in achieving desired returns amidst high fees and underperformance of hedge funds. It highlights the political and financial pressures on pension funds to negotiate fees and simplify portfolios. The discussion also covers the potential shift in investment strategies, with a focus on risk-adjusted returns and the role of hedge funds in providing diversification. The conversation suggests that CalPERS' actions may influence other funds to reconsider their investment allocations.

What are the main challenges faced by pension funds according to the text?

What is the significance of the fees paid by CalPERS in relation to their returns?

How does CalPERS' performance compare to the S&P during the same time period?

What reasons are given for the underperformance of hedge funds?

How do hedge funds provide diversification in a portfolio according to the discussion?

What are the implications of the political pressure on pension funds as discussed in the text?

What potential future actions might other pension funds consider based on CalPERS' decisions?