From Cassandra Does Tokyo:
...MOREValued Advice
Memorandum
To: Bea Wethervane, Senior Consultant, Coxbridge Associates
From: Hugh G. Shortphall, Florida University & College Teachers Pension Fund (FUCT)
Date: 31st May, 2013
Subject: Hedge Fund Allocations
_____________________________________________________________
I've appreciated your valuable advice to our plan over the years. As you know, the path to changes in orthodox investment policy in a plan such as ours is often long and arduous, particularly when trustees and oversight committees are involved. Witness our struggle to add mortgage derivatives, or expand our equity allocations with a dedicated BRIC component which we finally received approval for, and implemented in 2007. Our campaign to add a GSCI Commodity Index component, as per your recommendation, was not easier, though with your help, we finally gained approval for and deployed it in mid-2008. Your 2009 advice to implement a dedicated equity tail-risk program - one that we finally allocated to in Sep 2011 - was a big-step forward towards insuring our Board, Trustees (and plan members) could worry less about funding levels in the event of a market crash.
See also "Public Employee Pensions Face Up to the Scam of 'Commodities as an Asset Class'":
Wow.Or a hundred others, all timestamped:
In 2007-2008 Goldman and the other banks went forth and proclaimed commodities an asset class, basing the pitch on the move over the prior five-six years of most commods (if I recall correctly, gold bottomed at $252 in the Spring of 2001).
The so-called investment professionals at the behemoth funds (CalPERS topped out at $260.6 billion before getting their butts kicked), along with University endowments thought this was the easiest money they would ever make. Commodities are only going to go up and here was Goldman Sachs touting "Long-only Index Funds" In Goldman's case the index was their very own GSCI but if the index "investing" didn't give you enough action the pensions could evade position limits by entering into swaps deals to piggyback on Goldie's designation as a "commercial".
Good times. More below the jump....MORE
Stat du Jour: "99% of pension funds outperform CalPERS"
CalPERS Playing with Fire
From our Oct. 26, 2008 post, "Calpers Sells Stock Amid Rout to Raise Cash for Obligations":
This is hedge fund behavior, selling your most liquid investments to prop up the illiquid....Commodities: $50 bln in 'long-only funds' flees commods markets. And: Calpers says staying the course on commodities
