Here's something you might be interested in.
At a meeting September 21, the board of the San Diego City Employees' Retireent system approved a program to put 5 percent of assets into private equity -- the pools of capital that raise funds through low quality debt to be able to make shaky acquisitions. Last August, there was concern the access to junk bonds would dry up, but the Federal Reserve loosened money. The fund already has about 9 percent of its $5 billion in funds in hedge funds, although SDCERS doesn't call them hedge funds. Also, Peter Q. Davis points out that Boston's State Street Corp. is having problems: its five bond funds are down 43 percent this year and Alaska and Idaho may sue over losses in pension funds. State Street is the custodian for SDCERS funds. It permits State Street to loan out shares to short sellers. This nets the fund a little less than $1 million a year. Davis thinks that could be risky, and voted against it when he was on the board, but he was the only one to vote that way.
At a meeting September 21, the board of the San Diego City Employees' Retireent system approved a program to put 5 percent of assets into private equity -- the pools of capital that raise funds through low quality debt to be able to make shaky acquisitions. Last August, there was concern the access to junk bonds would dry up, but the Federal Reserve loosened money. The fund already has about 9 percent of its $5 billion in funds in hedge funds, although SDCERS doesn't call them hedge funds. Also, Peter Q. Davis points out that Boston's State Street Corp. is having problems: its five bond funds are down 43 percent this year and Alaska and Idaho may sue over losses in pension funds. State Street is the custodian for SDCERS funds. It permits State Street to loan out shares to short sellers. This nets the fund a little less than $1 million a year. Davis thinks that could be risky, and voted against it when he was on the board, but he was the only one to vote that way.