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The major investors in hedge funds are pension funds. Every dollar paid in "salary" to some hedge fund manager is a dollar out of someone's retirement.
by danieltillett 11y ago
The major investors in hedge funds are pension funds. Every dollar paid in "salary" to some hedge fund manager is a dollar out of someone's retirement.
- whatok 11y agoSo these magical hedge funds are so powerful that they can force people to invest in them?
- Strom 11y agoI'm not sure about these specific ones or how the law is in the US, but in Estonia where I live, you are indeed required by law to invest 4% of your pay into pension funds. The high management fees are a major criticism point of this system.
- danieltillett 11y agoYou as the beneficiary of (most) pension funds don't get to choose where your investments are placed. There is a massive agency problem with the people running pension funds paying out billions to hedge fund managers - especially when they know (or should know) that hedge funds don't add value across the entire investment industry.
- whatok 11y agoYou as the beneficiary of a pension fund absolutely can exert influence over the investment committee of the pension fund. If there is a process in place for remedying a problem like this, how does it become another party's fault? Additionally, if the claim that "hedge funds do not add value across the entire investment industry" is true, are these pension fund employees not in some sort of violation of fiduciary duty?
- danieltillett 11y agoI have no influence over my pension fund. Pension funds as a whole are so widely invested in the market that there is no way that a hedge fund can provide an overall return. All hedge funds are a complex way of robbing Paul to pay Peter at the pension fund level.
- jordanthoms 11y agoPension funds are run by big boys also (in fact they are much larger), if they think they can get better returns elsewhere they are free to move their funds there.
- deleted 11y ago[deleted]