Key Takeaways
- • San Francisco's pension fund board voted 6-1 to table a hedge fund allocation discussion for 90 days, delaying an immediate decision on whether to allocate capital to hedge funds or maintain zero exposure.
- • The 90-day delay allows the pension system additional time for further study and analysis of the hedge fund investment proposal before a final vote.
- • Board member Coaker presented the hedge fund allocation recommendation to the board, indicating this was a substantive proposal under active consideration.
Summary
San Francisco's pension fund postponed a significant asset allocation decision on June 12, 2014, when board members voted 6-1 to table discussion of hedge fund investment for 90 days. The decision defers what would have been an immediate determination on whether the pension system should allocate capital to hedge funds or maintain its current zero-hedge-fund position.
The board's supermajority vote to delay reflects deliberation around a material strategic question for the pension plan's portfolio construction. According to the resolution, board members requested additional study period to evaluate the hedge fund allocation proposal more thoroughly before committing to a final decision on capital deployment to the alternative asset class.
The tabling of this discussion suggests the pension system is actively reassessing its alternative investment strategy, particularly as institutional investors broadly have expanded exposure to hedge funds and other alternatives. The 90-day timeline positions the board for a full reconsideration of the proposal in the third quarter of 2014, allowing staff and investment advisers time to prepare detailed analysis and recommendations for the subsequent vote.
The board's supermajority vote to delay reflects deliberation around a material strategic question for the pension plan's portfolio construction. According to the resolution, board members requested additional study period to evaluate the hedge fund allocation proposal more thoroughly before committing to a final decision on capital deployment to the alternative asset class.
The tabling of this discussion suggests the pension system is actively reassessing its alternative investment strategy, particularly as institutional investors broadly have expanded exposure to hedge funds and other alternatives. The 90-day timeline positions the board for a full reconsideration of the proposal in the third quarter of 2014, allowing staff and investment advisers time to prepare detailed analysis and recommendations for the subsequent vote.
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