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San Francisco Fund Delays Hedge Fund Investments Again

Golden Gate Bridge

The San Francisco City & County Employees’ Retirement System (SFCCERS) decided earlier this summer to invest 15 percent of its assets in hedge funds. But the fund has never invested in hedge funds before – and some board members aren’t on board with the plan in its current form.

So, for the second time in three months, the board delayed a vote on the hedge fund investments. From FinAlternatives:

The $20.6 billion public pension delayed a vote on a planned $3 billion hedge-fund allocation for the second time last week, Pensions & Investments reports. The board first put off a vote in June.

The planned alternative investments allocation has become a source of contention at the San Francisco fund. Board member Herb Meiberger has vocally opposed it, going so far as to seek—and win—the support of Berkshire Hathaway chief Warren Buffett, who urged the pension to use index funds rather than hedge funds.

Meiberger remains the only board member in certain opposition. But the other board members appeared open to joining him, as well as to supporting Chief Investment Officer William Coaker, who has championed the plan. Coaker presented a detailed report to the board on Wednesday, but his fellow members demanded still more information before voting to table the matter for another 90 days.

The key issue for board members seems to be the specific allocation of the money. Board members wanted to know, specifically, what hedge funds were to be invested in. But that information wasn’t available.

The board will vote again in early December.

Photo by Kevin Cole via Flickr CC License

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