CalPERS backs new investor guide
01 June 2011 Sacramento
Image: Shutterstock
The California Public Employees鈥� 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.
鈥淧ublic pension funds and other institutional investors account for most of the capital within the hedge fund industry,鈥� said Joseph Dear, CalPERS chief investment officer. 鈥淭his guide by AIMA鈥檚 Investor Steering Committee contains recommendations that will enhance our partnerships with fund managers. It鈥檚 a good benchmark for this maturing industry.鈥�
The Investor Steering Committee paper, A Guide To Institutional Investors鈥� Views and Preferences Regarding Hedge Fund Operational Infrastructures recommends, for example, that:
Hedge funds鈥� investment objectives and strategies should describe the assets to be invested, geographic sectors where the assets may be limited and management trading style;鈥�
Hedge funds have predominantly independent boards of directors who are materially free of conflicts with the investment manager;鈥�
Hedge fund risk reporting should give investors the necessary tools to understand how much risk managers are utilizing within their portfolios;鈥�
Investors should be able to track the performance of hedge funds based on quantitative and qualitative reports that are updated at least monthly; and鈥�
Hedge fund managers should give investors the information they need to analyse a fund鈥檚 goals, strategy capacities and resources to achieve those goals.
鈥淧ublic pension funds and other institutional investors account for most of the capital within the hedge fund industry,鈥� said Joseph Dear, CalPERS chief investment officer. 鈥淭his guide by AIMA鈥檚 Investor Steering Committee contains recommendations that will enhance our partnerships with fund managers. It鈥檚 a good benchmark for this maturing industry.鈥�
The Investor Steering Committee paper, A Guide To Institutional Investors鈥� Views and Preferences Regarding Hedge Fund Operational Infrastructures recommends, for example, that:
Hedge funds鈥� investment objectives and strategies should describe the assets to be invested, geographic sectors where the assets may be limited and management trading style;鈥�
Hedge funds have predominantly independent boards of directors who are materially free of conflicts with the investment manager;鈥�
Hedge fund risk reporting should give investors the necessary tools to understand how much risk managers are utilizing within their portfolios;鈥�
Investors should be able to track the performance of hedge funds based on quantitative and qualitative reports that are updated at least monthly; and鈥�
Hedge fund managers should give investors the information they need to analyse a fund鈥檚 goals, strategy capacities and resources to achieve those goals.
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