Kentucky Retirement Systems plans to get out of hedge funds

The $14.9 billion Kentucky Retirement Systems plans to end its controversial investments in hedge funds.

The KRS board’s investment committee on Friday reached “a general agreement” on a three-year plan to withdraw about $1.5 billion that KRS has invested in hedge funds over the last six years. Formal votes must follow for the committee on Nov. 2 and the full board on Dec. 1.

Hedge funds are privately run portfolios that try to make a profit regardless of market conditions. They can include combinations of stocks, bonds, real estate, commodities and other assets, some of them risky. Public pension systems in California, New York and elsewhere already have begun divesting from hedge funds.

The KRS board, with new members appointed by Republican Gov. Matt Bevin, wants to focus on more simplified assets with lower fees and greater liquidity, said David Eager, KRS executive director. With the largest pension fund for state employees only 17 percent funded to meet its future liabilities, there will be a greater need for cash flow in coming years, Eager said.

Read more here: http://www.kentucky.com/news/politics-government/article108291592.html