Local authorities dump hedge funds for DGFs – different rose, same thorns?

Hedge funds have taken somewhat of a battering from local authority schemes, as we have reported over the past couple of weeks.

This week we covered the Oxfordshire County Council Pension Fund ditching its entire 2.2 per cent allocation to the asset class. While a relatively small allocation, it represented £33m of its £1.5bn of assets.

The Dorset County Council Pension Fund also decided to drop its 6 per cent allocation to hedge funds. Lack of transparency and high fees were cited by the schemes as reasons why hedge funds had been relegated to the cutting room floor.

The FT had also reported that the London Pensions Fund Authority had pulled all its holdings in Brevan Howard, the world’s largest hedge fund, over transparency issues. The scheme reportedly made a request to the hedge fund to redeem its £61m in April of last year. 

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