Public Pensions Take A Second Look at Hedge Funds

January 17, 2013   Imogen Rose-Smith

Insider trading scandals scarred the hedge fund industry in 2012, causing pension funds to reexamine their allocations to long-short equity managers.

With the federal government's insider trading investigation producing ever-higher numbers of hedge fund manager convictions, public pension fund investors are starting to take a hard look at their own hedge fund portfolios. Their main concern? Whether long-short equity managers can gather the kind of information that gives them an edge within legal parameters and still produce outsize returns.

"Can you really have an information advantage without some kind of nonpublic information?" asks Lee Partridge, CIO of Houston-based investment advisory firm Salient Partners and the outsourced...

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