Boston Globe – State pension officials defended their moves into hedge funds yesterday, presenting numbers showing the investments have reduced the risk in the portfolio of thousands of public-sector retirees.
Secretary of State William Francis Galvin voiced concern on Monday that the Massachusetts Pension Reserves Investment Trust was betting too heavily on hedge funds, which now account for 5 percent of its total assets of $40 billion. The pension fund’s board, chaired by State Treasurer Timothy P. Cahill, plans to increase that share to 10 percent by the end of this year.
Hedge funds operate like mutual funds in pooling investor money, but face fewer regulations and are known for making riskier bets. However, in an interview yesterday, Michael Travaglini, executive director of the agency that oversees the state fund, said the five hedge-fund advisers the state has hired since 2004 were chosen for their conservative investment strategies.
