Some European pension plans are finally wising up to the statistical reality that hedge funds are an expensive way to add no value. These plans are reducing their stakes in hedge funds or divesting altogether. Good for them. It's too bad that the Church of England has yet to figure that out. It has increased its commitment to hedge funds. The Church's commitment makes no sense in light of its governing body's commitment to better corporate governance.
Hedge funds are among the most opaque, poorly managed investment vehicles available. So-called evidence that these things proved their worth in the 2008 financial crisis ignores what would have happened if a few more prime brokers had gone under. Prime brokerages provide credit to hedge funds. Those funds' leveraged bets on obscure, illiquid instruments would have collapsed without the bailouts that backstopped the largest investment banks.
England is further from insolvency than than the Continent. Its troubles are no more than a year or two behind Europe's so there is still a small window during which British institutions can be foolish with money.
Nota bene: Alfidi Capital is not a hedge fund. I have never invested in hedge funds and never will.
Hedge funds are among the most opaque, poorly managed investment vehicles available. So-called evidence that these things proved their worth in the 2008 financial crisis ignores what would have happened if a few more prime brokers had gone under. Prime brokerages provide credit to hedge funds. Those funds' leveraged bets on obscure, illiquid instruments would have collapsed without the bailouts that backstopped the largest investment banks.
England is further from insolvency than than the Continent. Its troubles are no more than a year or two behind Europe's so there is still a small window during which British institutions can be foolish with money.
Nota bene: Alfidi Capital is not a hedge fund. I have never invested in hedge funds and never will.
