September 23, 2024 | PIONLINE.COM | $16 AN ISSUE / $350 A YEAR
James Yang
Pension Funds
U.S. equities drive robust returns for public pensions Median return of 9.9% makes second straight year of impressive gains B y ROB KOZLOWSKI
SPECIAL REPORT HEDGE FUNDS
Multimanager hedge funds looking to allocate to external firms in race for talent Hedge funds are always looking for new investments and one is increasingly gaining steam: allocating to other hedge funds. While investing in other funds is nothing new for the hedge fund industry, the last few years have brought growth in both the number of funds doing so as well as the number of
external allocations. External allocation has echoes of the once dominant hedge fund-offunds industry as well as the standalone seeding firms that gave a previous generation of managers their start. But these days, it is multimanager hedge funds — a sector that has seen immense growth in recent years and SEE EXTERNAL ON PAGE 22
Washington
How Harris and Trump compare on taxes, capital gains and the economy
In this report ■ For a list of the largest hedge
funds, see Page 19
■ Hedge funds diving into private
credit. Page 18
■ Dmitry Balyasny looks back,
and forward. Page 20
■ For the full report,
go to PIonline.com/ hedgefunds2024
Gareth Copley/Getty
B y LYDIA TOMKIW
U.S. public pension funds chalked up a second straight year of positive returns for the fiscal year ended June 30, with half posting double-digit numbers despite a somewhat muted bond market and continuing challenges in private markets. While experts said this was all good news, the dominance of U.S. equities has left them having to convince some public pension fund board members that diversification is still important. The median return was 9.9% among the 64 pension funds with more than $1 billion in assets whose results had been tracked by Pensions & Investments as of Sept. 16. The median return among plans tracked by P&I the previous fiscal year was 7.6%. For the most recent fiscal year, every tracked pension fund reported positive returns — with a range
PUBLIC MARKETS LEAD WAY: Wilshire
Advisors’ Thomas Toth
of 5.9% to 14.5% — and those with greater exposure to public equities and lesser exposure to private markets posted the most impressive numbers, continuing a trend from the prior fiscal year. It was even a more impressive year than fiscal year 2023 when pension funds recovered strongly from an anemic fiscal year 2022 that saw negative returns across the board. Returns for the fiscal year ended June 30, 2023, ranged from 2.2% to 11.9%. SEE RETURNS ON PAGE 34
Private Equity
Cricket has billions of fans worldwide, and private equity wants in B y PALASH GHOSH
B y BRIAN CROCE
A few weeks after the National Football League invited private equity firms to purchase passive stakes in their teams, a very different sport across the pond said it's planning something similar. While largely unknown in the U.S., cricket is the second most popular sport in the world behind only soccer, boasting at least 2.5 billion fans, according to the World Atlas. That dwarfs the popularity of such U.S. sports as basketball (800 million fans) and baseball (500 million). Now private equity firms may compete into the medieval sport which is thought to have originated in Britain and is played throughout South Asia, the Caribbean, South
Voters routinely tell pollsters the economy is their most important issue in the 2024 election. And though there are many dividing lines between the two candidates vying for the U.S. presidency, they notably have vastly different economic visions. Regardless of who wins the White House and which parties control the House and Senate, tax policy will be a major discussion point in Washington next year as many of the provisions in the Republican’s 2017 Tax Cut and Jobs Act expire in 2025. Whether those provisions should be extended, amended or be allowed to lapse, and how — if at all — a package should be paid for will be hotly debated. On the campaign trail, both Vice President Kamala Harris
SEE CRICKET ON PAGE 29
SEE HARRIS/TRUMP ON PAGE 30
SOUND BITE ARCTOS’ IAN CHARLES: ‘I’m a nerd who loves this asset class of private equity.’ Page 2
Women execs paying it forward Honorees from the 2024 class of Influential Women in Institutional Investing are dedicated to their mentorship duties. Page 3