Hedge fund guru George Soros said at the Davos Economic Forum last week that he doesn’t think pension funds should be investing in hedge funds. He cited the current market, management fees and recent under-performance as reasons for his view.
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George Soros echoed Warren Buffett’s concerns about the intersection of hedge funds and pension funds.
Speaking at the Davos Economic Forum last week, Soros said that pension funds should avoid investing in hedge funds and warned of increased risks and concerns about the global middle class and retirees. Soros cited hedge fund management fees in his argument that pushing public employee money into hedge funds is foolish.
“Current market conditions are difficult for hedge funds,” said Soros. “Their performance tends to be equal to the average plus or minus a 20 percent management fee.”
“You will always have some hedge funds that will provide outside performance …” he continued. “To put a large portfolio into a hedge fund is not a winning strategy.”
Soros founded Soros Fund Management in the late 60’s. For decades, it was one of the best-performing firms in the hedge fund industry.
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