The financial world received a shock recently when CalPERS, a Californian pension fund with assets amounting to more than 200 billion euros, announced it would eliminate its hedge fund programme, taking 4 billion euros out of the game.
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Pension funds shun high-risk investments
Hedge funds are portfolios of investments managed aggressively to generate high returns regardless of the market situation. They are expensive, and reducing costs was one reason behind CalPERS's decision to ditch them.