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Pension funds’allocations to hedge funds: an empirical analysis of US and Canadian defined benefit plans

Author

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  • Vincent Bouvatier

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

  • Sandra Rigot

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper investigates the characteristics of US and Canadian pension funds that allocate assets to hedge funds. The typical pension fund that invests in hedge funds is a large sophisticated pension fund that diversi es its portfolio across numerous classes of investments, private equity in particular, uses a core-satellite organization and has access to low delegation costs for alternative assets. Moreover, we find that pension funds investing in hedge funds signi ficantly obtained higher global returns.

Suggested Citation

  • Vincent Bouvatier & Sandra Rigot, 2013. "Pension funds’allocations to hedge funds: an empirical analysis of US and Canadian defined benefit plans," Working Papers hal-04141220, HAL.
    • Handle: RePEc:hal:wpaper:hal-04141220
    Note: View the original document on HAL open archive server: https://hal.science/hal-04141220
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    References listed on IDEAS

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    Cited by:

    1. Wang, Lijian & Béland, Daniel & Zhang, Sifeng, 2014. "Pension financing in China: Is there a looming crisis?," China Economic Review, Elsevier, vol. 30(C), pages 143-154.
    2. Laurens Defau & Lieven De Moor, 2018. "The impact of plan and sponsor characteristics on pension funds’ asset allocation and currency diversification," Journal of Asset Management, Palgrave Macmillan, vol. 19(1), pages 27-37, January.
    3. Laurens Defau & Lieven De Moor, 2021. "The investment behaviour of pension funds in alternative assets: Interest rates and portfolio diversification," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 1424-1434, January.

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    More about this item

    Keywords

    pension funds; hedge funds; asset allocation; diversi cation;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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