Joining a growing number of pension funds, trustees of the New York City Employees' Retirement System voted in April to stop investing in hedge funds and to liquidate their existing investments "as soon as practicable."
NYCERS is the largest municipal public employee retirement system in the United States, with more than 300,000 active members and retirees. According to reports, hedge funds accounted for $1.45 billion of NYCERS' $51.2 billion in assets as of Jan. 31, 2016.
American Federation of Teachers President Randi Weingarten applauded the move.
"Hedge funds are becoming a bad bet for working families. A recent AFT report found that public employees in New York City and 10 other pension funds would have been better off if they had never invested in hedge funds. Not only did hedge funds underperform compared with a standard index fund, pension funds paid an average of $81 million in management fees in 2015 alone," Weingarten said in a statement.
"Adding insult to injury, many of the billionaire hedge fund managers use their profits to launch political attacks on public pensions, public services, public schools and the mechanisms that give working people a shot at success. This vote ... is a win for working families and the entire city of New York."