Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Guidance and Visibility -- Ignore unavailable to you. Want to Upgrade?

To: 2MAR$ who wrote (30010)	11/11/2001 3:55:34 PM
From: SusieQ1065	Respond to of 208838

hi M...i love this....calPERS moves to the dark side...;-) CalPERS' Hedge Fund Move May Spark Trend Nov 11 3:21pm ET By Svea Herbst-Bayliss NEW YORK (Reuters) - The California Public Employees' Retirement System is set to pour more money into exclusive investment funds for the wealthy, a move that may spur smaller pension funds to jump into the hot hedge fund industry. CalPERS, America's biggest pension fund, will invest $1 billion with 10 to 15 hedge fund managers over the next 18 months to help boost returns on the $151 billion it manages for the state's 1.2 million public sector workers and retirees. "We already have $600 million invested in hedge funds and are going to invest an additional $1 billion going forward. I expect to make the first hedge fund investments in the first quarter of next year," said Mark Anson, senior investment officer at CalPERS. CalPERS is also mulling plans to invest for other pension funds that may not have the resources and expertise to evaluate the performance and strategies of hedge funds, which are unregulated investment pools. In effect, CalPERS could become a fund-of-fund manager, charging other pension funds fees to invest their money with hedge fund managers, Anson said. Already General Electric's asset management arm is managing money for outsiders and General Motors is considering to do the same. For many pension funds, CalPERS' experience with hedge funds will be a litmus test, determining whether they too should take the plunge. Whatever the California-based fund does will have an enormous knock-on effect in the market because other institutions regularly scrutinize and often imitate CalPERS investment strategies. CalPERS' decision to invest in hedge funds highlights how popular these funds have become, showing they are no longer reserved only for wealthy individuals who can commit at least $1 million. With at least one new fund starting every day, the industry is booming and CalPERS is jumping on the band wagon as traditional investors are demanding higher returns at a time of broad market declines. Hedge funds have been celebrated for their superior returns but also feared for employing risky investment techniques. To boost returns -- or losses -- hedge funds can sell stocks short or use borrowed money, a strategy that has paid off this year when the average hedge fund is up 2 percent while the Standard & Poor's 500 index lost more than 20 percent. CalPERS wants its hedge fund investments to return between 7 percent and 8 percent on top of Treasury bill yields, Anson said. This is far less than the higher double digit returns some of the most successful funds have delivered. Although hedge funds sometimes have a bad reputation, CalPERS decision to pursue them is aimed at diversifying the portfolio not engaging in unduly risky practices. More conservative investors are now becoming more comfortable with them, three years after the spectacular collapse of hedge fund Long Term Capital Management forced the industry to overhaul its practices, lower risk and become more open. While CalPERS is still a novice in hedge fund investing, the group is experienced in other alternative investment, like private equity, which often amounts to investments in troubled companies with the aim of turning them around. CalPERS already invests $9 billion and has taken a 5 percent stake in the Carlyle Group private equity firm. With its hedge fund program poised to take off, industry analysts say CalPERS may, however, suffer some of the setbacks that come with size. "Some people don't want to take them for fear of having them be the biggest investor and then be in a position to dictate terms," said James Owen, an industry analyst and investor who runs a Web site called PrudentInvestor.com. To remain nimble, many hedge funds try to cap their assets and CalPERS may be forced to take their money to the biggest players in the $500 billion industry. "The bigger funds are not going to be as hungry as the smaller ones. They may rightly be enjoying the wealth they earned earlier," said Jim Torrey, chairman of The Torrey Funds, which invests in hedge funds.

To: 2MAR$ who wrote (30010)	11/11/2001 8:17:28 PM
From: Smart_Money	Respond to of 208838

This is going to be real interesting. What is the U.S. going to do when the Northern Alliance takes over the city. Tell them that control of Afganistan is not for the Northern Alliance regime? Abdullah said the Northern Alliance agreed with U.S. officials -- including President Bush -- that its forces should not move into the capital immediately. "We do not want to see any conflict in Kabul. Kabul should serve as a venue for talks, negotiations, for peace, the conception of Afghanistan, building institutions. That part is understandable to us," Abdullah said. After holding talks with Pakistani President Pervez Musharraf on Saturday, Bush encouraged the Northern Alliance to head toward Kabul but not into the city, saying control of the capital was key to any future political arrangement in the country. Pakistan does not support the Northern Alliance in a post-Taliban government, should the regime fall. But Abdullah said U.S. officials should pay less attention to Pakistan's concerns, blaming Pakistani support for the Taliban for much of the region's problems.