Hedge funds may not draw as much pension money

When it comes to alternative investments, are private equity funds and hedge funds equal? Maybe not. Private equity funds, the big names anyway, have been able to post superlative returns over the past few years. Yes, they're in quite a pickle now, but their track records speak for themselves. One indication of their in-favor status, about 35% of corporate plans had money in private equity last year, compared with 33% in 2005. I doubt that will dip much. Unfortunately, hedge funds do not enjoy the same penetration. About a quarter of the same pensions invested in hedge funds in 2006, which is up from 21 percent the year before. Financial Week says that many pensions are now rethinking their hedge fund plans. Some are doing more stress testing. Not one bit surprising. In general, most will opt to retain some exposure if only for the sake of diversification--which will keep the hunt for non-stock market correlated funds intense.  

For more background:
- here's the Financial Week article