WEST PALM BEACH, FL (www.hedgeco.net) – Mark Anson, the Chief investment officer of the California Public Employees Retirement System {CalPERS, has expressed fears that the US private equity marketmay be heading for a crash. According to Anson, such crash may be the product of the increasing US interest rates along with the desire for hedge fund managers to produce absolute returns for theirinvestors.
Anson whose Pension fund was one of the first in the US to invest with hedge fund managers said at the moment, he is afraid of private equity. Anson explains that,� Hedge funds are competing with buyout managers, and that convergence scares me.� Anson made his remarks at an industry conference in Geneva Switzerland. CalPERS, is the largest pension fund manager in the United States, overseeing over $175 billion in pension fund assets. About $20 billion of the CalPERS pension assets are devoted to private equity according to published reports.
�Hedge funds attracted record asset inflows in 2004�, according to Anson, �Hedge fund managers have increasingly turned to private equity deals, which are highly leveraged. Buyers of such deals borrow significant amounts so as to magnify investment returns.� According to Anson, �If too much competing capital pushes down returns in long-term locked-up deals at the same time as the price of money increases, there is a danger that investments will go sour as investors’ calculations are thrown off track.� While many predictions have been made in the past about potential hedge fund bubble, so far none has materialized, and many hedge fund market observers do not share such views. Hedge funds continue to attract more investor interest and such trend may be continuing for the immediate future.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
HedgeCo.Net is the most popular hedge fund database and community in the world. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com.
